Vat question

Pete McCabe

Hi,

I have a question if anybody can help.

If my total turnover for my business Is 170k,
105k of this is zero rated stock (children’s clothes)

65k of the 170k is sales on vat-able goods.

Do I need to register for vat? Or am I still under the threshold?

Any advice would be appreciated.

Thank you in advance

Thethunder

Pete McCabe wrote: »

Hi,

I have a question if anybody can help.

If my total turnover for my business Is 170k,
105k of this is zero rated stock (children’s clothes)

65k of the 170k is sales on vat-able goods.

Do I need to register for vat? Or am I still under the threshold?

Any advice on oils be appreciated.

Thank you in advance

Yes. But you can register on a cash receipt basis.

Ie you only pay the vat once you get paid yourself.

Pete McCabe

Thethunder wrote: »

Yes. But you can register on a cash receipt basis.

Ie you only pay the vat once you get paid yourself.

Up to date I haven’t been charging customers vat to date because I haven’t been registered for vat, I have however been paying vat on all purchases myself to suppliers.

Will revenue backdate it and hit me with a vat bill? Or will they only charge me going forward from signing up?

Sorry for all the questions, I’m just so puzzled when it comes to vat.

Calahonda52

Pete McCabe wrote: »

Hi,

I have a question if anybody can help.

If my total turnover for my business Is 170k,
105k of this is zero rated stock (children’s clothes)

65k of the 170k is sales on vat-able goods.

Do I need to register for vat? Or am I still under the threshold?

Any advice would be appreciated.

Thank you in advance

https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/what-are-the-vat-thresholds.aspx
is it B2B or B2C?

Pete McCabe

Calahonda52 wrote: »

https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/what-are-the-vat-thresholds.aspx
is it B2B or B2C?

It would be B2B, but I sell to mostly market traders ect most of which would not be vat registered.

I have never charge vat to anybody, I thought I was under the threshold as my vat-able sales are under the 75,000 and the rest of the stuff I sold is zero rated stock.

If I have to register for vat I absolutely will, I’d prefer not to if I wasn’t obliged to, but now I’m terrified that if I do register for vat will revenue backdate sales to January 18 and hit me with a big bill, which would cripple me.

Stratvs

Pete McCabe wrote: »

Hi,

I have a question if anybody can help.

If my total turnover for my business Is 170k,
105k of this is zero rated stock (children’s clothes)

65k of the 170k is sales on vat-able goods.

Do I need to register for vat? Or am I still under the threshold?

Any advice would be appreciated.

Thank you in advance

From what you say the threshold in your case is €75,000.

"Value-Added Tax (VAT) registration is obligatory when your turnover exceeds or is likely to exceed the VAT thresholds. The thresholds depend on your turnover in any continuous 12 month period".
https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/what-are-the-vat-thresholds.aspx

Sales of zero rated goods are still turnover. Think of it, a butcher selling meat only at 0% with a turnover of €500Kpa. They still have to register.

One is supposed to monitor the position regularly and then register once it's apparent the threshold will be exceeded.

You need to sit down and see what the position would have been had you been registered since day 1.
Sales VAT in your case will be on the 23% (adult clothes?) sales.
This will be on the difference between the VAT on sales and VAT on purchases i.e the VAT on your mark-up. So if you have €65K in 23% sales VAT there is €12K less the VAT on your purchases ( lets say for purposes of this it's €40K so VAT = €7.5K ) so there is net VAT payable of €4.5K. Then you have the input VAT on overheads which is claimable. Premises light/heat/phone/repairs etc. which is deducted form VAT payable. It may not be that bad.

I'd seriously suggest (if you don't already have one) that you get an accountant on board to look at this with you.

Pete McCabe

Stratvs wrote: »

From what you say the threshold in your case is €75,000.

"Value-Added Tax (VAT) registration is obligatory when your turnover exceeds or is likely to exceed the VAT thresholds. The thresholds depend on your turnover in any continuous 12 month period".
https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/what-are-the-vat-thresholds.aspx

Sales of zero rated goods are still turnover. Think of it, a butcher selling meat only at 0% with a turnover of €500Kpa. They still have to register.

One is supposed to monitor the position regularly and then register once it's apparent the threshold will be exceeded.

You need to sit down and see what the position would have been had you been registered since day 1.
Sales VAT in your case will be on the 23% (adult clothes?) sales.
This will be on the difference between the VAT on sales and VAT on purchases i.e the VAT on your mark-up. So if you have €65K in 23% sales VAT there is €12K less the VAT on your purchases ( lets say for purposes of this it's €40K so VAT = €7.5K ) so there is net VAT payable of €4.5K. Then you have the input VAT on overheads which is claimable. Premises light/heat/phone/repairs etc. which is deducted form VAT payable. It may not be that bad.

I'd seriously suggest (if you don't already have one) that you get an accountant on board to look at this with you.

Thank you very much for the informative reply & taking the time to reply to me, I will do just as you suggested.