Hi
Assuming a LLP with VAT registration number is selling clothing online. The products are shipped from the UK within the UK and europe.
These questions raise as the LLP has expense like fees, shipping costs, import tax, etc.
I like to understand if the VAT (ie 20% ) is paid dairectly or if there are ways to deduct expense before?
Will the VAT be paid in the annual income tax or will this be paid in a different cycle?
Is it possible to deduct all expense in the annual income tax return against the VAT?
Thanks
Sandra
Replies (3)
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VAT Returns are usually quarterly. If the result of non-UK sales means that Returns are usually repayment, then you can apply for monthly VAT Returns. For a tunrover up to £1.35m,, you can apply for Annual Accounting.
In each case, you can claim input tax on expenses, including shipping costs, storage, marketing, etc. You will need proper VAT invoices to evidence such claims.
Your annual income tax return is entirely separate.
You need to appoint an accountant
Will the VAT be paid in the annual income tax or will this be paid in a different cycle?
Is it possible to deduct all expense in the annual income tax return against the VAT?
You would be very strongly advised to hire an accountant immediately. Your question indicates that you have no experience of VAT and possibly also of income tax. This is a complex area that you need to get right or you will receive severe penalties from HMRC.
This forum cannot possibly answer all of the questions that you will need to ask in order to comply with your VAT obligations, as we cannot compress all VAT legislation into a forum like this. You can start by reading the VAT Notice 700: the VAT guide, which will give you the basics of VAT. Alternatively, you might like to appoint an expert to advise you.