VAT on products

VAT on products

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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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chips_at_mattersey
By Les Howard
11th Jan 2016 16:02

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.

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Replying to SXGuy:
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By sndra
11th Jan 2016 22:34

Hi leshoward, We will likely have a turnover far below £1.35m, does it mean we can immediatly apply for annual accounting? Would this VAT Return be considered as accounting for the LLP or is there an additiaonl TAX Return for the LLP at the year end?

Would the annual income tax reaturn you mentioned be the individual members self-assesment at the year end?

Assuming the member is not taking out any salary/income from the LLP; would the annual income tax reaturn be zero as well?

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By Charlie Carne
12th Jan 2016 01:38

You need to appoint an accountant

sndra wrote:

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.

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