VAT refund, not registered for VAT

cruhoortwunk

I have small company with total services for the year less than the VAT registration threshold of €37,500.
So how do I claim a VAT refund without having the VAT registration number? I know that if I had the reg. number I would enter it when purchasing from a website, and they would waive the VAT.
But without a reg number, do I pay the VAT and claim it back? Any idea what form is required?

GerardKeating

cruhoortwunk wrote: »

I have small company with total services for the year less than the VAT registration threshold of €37,500.
So how do I claim a VAT refund without having the VAT registration number? I know that if I had the reg. number I would enter it when purchasing from a website, and they would waive the VAT.
But without a reg number, do I pay the VAT and claim it back? Any idea what form is required?

You cannot claim a refund, if you are not registered for VAT.

You have two choices,

• Register for VAT, so that you can claim refunds, but then you have to charge your customers VAT.
  
• Do not Register for VAT, so no refunds, but then you DO NOT have to charge your customers VAT.

regards

frozenfrozen

you would be using the vat you paid to offset the vat you owe, since you owe no vat you can't claim against it

mickdw

You don't need to concern yourself with vat at all.
You buy inclusive of vat, no deductions. You don't charge vat on your services so it's swings and roundabouts.

cruhoortwunk

Cheers lads

Stacksofwacks

I'm also a recent business start up and faced with the same problem. However, I did register for VAT in order to claim back VAT paid on computer and office equipment. Am i right in saying that you don't have to charge VAT on goods sold if you are under the VAT threshold, even if you are registered for VAT?

relax carry on

Stacksofwacks wrote: »

I'm also a recent business start up and faced with the same problem. However, I did register for VAT in order to claim back VAT paid on computer and office equipment. Am i right in saying that you don't have to charge VAT on goods sold if you are under the VAT threshold, even if you are registered for VAT?

No. How would that make sense. You must charge Vat on your sales.

Stacksofwacks

relax carry on wrote: »

No. How would that make sense. You must charge Vat on your sales.

So I shouldnt have registered for VAT then? My turnover projected in year one would be 20-30K

relax carry on

Stacksofwacks wrote: »

So I shouldnt have registered for VAT then? My turnover projected in year one would be 20-30K

Did you receive any professional advice before electing to register?

http://www.revenue.ie/en/tax/vat/guide/registration.html#section10

jimmii

Stacksofwacks wrote: »

So I shouldnt have registered for VAT then? My turnover projected in year one would be 20-30K

Being under the threshold doesn't mean you shouldn't have necessarily. Its best to read up on it and work out what is best for you and your business. Not being VAT reg'd will let people know that you are a micro business which is something to consider.

Gloomtastic!

If you are just selling to other businesses then registering and charging VAT is not really an issue, you are just another little tax collector for the Revenue. It can be advantageous in that it makes your business look professional and that you are doing ok.

If you are just selling to consumers then you are either adding 23% on to your cost price therefore making you uncompetitive or else giving 23% of your cost price to the Revenue making you less profitable.

Which one are you?

Stacksofwacks

This is beyond a headwreck. Ill just keep 23% of all sales aside until i find out what the best course of action is. The products im selling have tight margins as it is, so raising the price would be out of the question. thanks for the advice.

jimmii

Stacksofwacks wrote: »

This is beyond a headwreck. Ill just keep 23% of all sales aside until i find out what the best course of action is. The products im selling have tight margins as it is, so raising the price would be out of the question. thanks for the advice.

The next filing date is in a couple of weeks so you should be transferring May/June to Revenue then. When did you register for VAT? If it was before May the you should have filed for the periods before that as well. Its nothing to worry about Revenue are surprisingly helpful and with new businesses pretty patient. Its not 23% of sales price that you are collecting on behalf of Revenue it's 18.69% (for standard rate 23% products) so hopefully that makes it a little easier!

pedronomix

if you buy for €1 + 23% = 1.23
sell for €2 + 23% vat - 2.46
You then owe Revenue the difference in the Vat paid/charged ie 23cent.

exaisle

pedronomix wrote: »

if you buy for €1 + 23% = 1.23
sell for €2 + 23% vat - 2.46
You then owe Revenue the difference in the Vat paid/charged ie 23cent.

To clarify.....23 cent is 18.69% of €1.23. However, if you have paid VAT on other expenses (eg phone bills, electricity etc) then you MAY be able to deduct the VAT on all or part of these too, reducing your VAT liability further.

If you think this is a headwreck, then you definitely need some professional advice.
Perhaps go see an accountant sooner rather than later...

delahuntv

Stacksofwacks wrote: »

This is beyond a headwreck. Ill just keep 23% of all sales aside until i find out what the best course of action is. The products im selling have tight margins as it is, so raising the price would be out of the question. thanks for the advice.

Headwreck? - No terribly simple.

Under the threshold you have a choice whether to register or not.

Over the threshold you must register.

If you expect your business to grow, then register. If you sell mainly to other vat registered people (other businesses), probably best to register. If its a small sideline business and selling mainly to non registered people (public) then probably best not to register til threshold is reached.

If your VAT liability is small, (under 3k a year) you can do a return once every 6 months.

http://www.revenue.ie/en/tax/vat/guide/accounting.html

Like others, get professional advice, or even give your regional tax office a call - revenue are superb to deal with and will give you a lot of good advice.

portcrap

What if you are 'pre trade' and have accumulated a number of expenses i.e. equipment, fuel, sales expenses etc. Can you claim VAT back on these if you haven't made sales yet?

i.e. get a refund from revenue for the VAT paid on the relevant items associated with the costs of setting up the business?

jimmii

portcrap wrote: »

What if you are 'pre trade' and have accumulated a number of expenses i.e. equipment, fuel, sales expenses etc. Can you claim VAT back on these if you haven't made sales yet?

i.e. get a refund from revenue for the VAT paid on the relevant items associated with the costs of setting up the business?

Just register straight away you don't need to start trading to reg for vat. No point waiting if you are going to have significant costs you definitely want to be getting that vat back!

portcrap

jimmii wrote: »

Just register straight away you don't need to start trading to reg for vat. No point waiting if you are going to have significant costs you definitely want to be getting that vat back!

But there would never be a situation where revenue issue you a cheque for VAT refund if you have no sales to reclaim against?

dbran

portcrap wrote: »

But there would never be a situation where revenue issue you a cheque for VAT refund if you have no sales to reclaim against?

Yes but the revenue are not stupid.

If you claim a refund on equipment etc and it is significant they will probably ask you lots of questions before they write that cheque. They may even send a person out to see what is going on and that you are actually a business engaged in a trade that is going to make taxable supplies in the state.

And you certainly will not be allowed to quickly deregister once the sales start to happen without repaying the refunds already claimed. You will have to charge VAT on your sales.

dbran

jimmii

portcrap wrote: »

But there would never be a situation where revenue issue you a cheque for VAT refund if you have no sales to reclaim against?

They will just send you a refund on the VAT. My first VAT filing was -€1800 it was handy getting that back at the time! As long as they are legitimate expenses and you are actually going into business they should be happy enough as dbran says they might ask a few questions but as long as you are being legit then there should be nothing to worry about. They know that companies don't just start trading from day 1.

scr6

Hi guys,

This is just the thread I was looking for - I'm two weeks out from launching my business and looking to register for VAT. I have a few invoices coming in at the moment for work done to get the business up and running plus some equipment - am I right in saying that unless I am registered for VAT when I receive the invoice, I can't offset this VAT I would pay against VAT I would owe?

I've been looking at the revenue.ie site and as informative as it is, I'm finding it quite confusing. I think its best to meet a professional to take care of this as I don't want to slip up when it comes to revenue matters. Who should I be speaking to about this - just a normal accountant?

Thirdly, I want to transfer to a limited company (currently registered as a sole trader) - should I do all of this at the same time?

Sorry for ambushing this thread, thought it was better to add here while the topic was open rather than starting a fresh one.

Thanks in advance for any sort of help,

Shane

exaisle

scr6 wrote: »

Who should I be speaking to about this - just a normal accountant?

Yes. And you certainly shouldn't be taking the advice of anybody on boards.ie (including myself) too seriously. With the best will in the world, people will give you bad or incorrect advice and free advice is usually worth exactly how much you paid for it.

Consult a professional...in this case, an accountant, and do it soon.

E.

Gloomtastic!

It’s been eight years for the OP to sort his VAT out. Zombie thread locked.