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vat on uk imports being sold here

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  • 05-06-2007 5:35pm
    #1
    mayto
    Registered Users Posts: 850 ✭✭✭


    a friend is setting up a small side business selling items here he will source from uk supplier. his total turnover will be less than 70k, so i take it he does not have to pay vat according to revenue.ie. does he pay the uk firm their price incl. uk vat and then does he pay/charge vat on what he sells here. sorry, i am a bit confused about it myself.


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    #2
    jmcc
    Registered Users Posts: 7,410 ✭✭✭jmcc


    mayto wrote:
    a friend is setting up a small side business selling items here he will source from uk supplier. his total turnover will be less than 70k, so i take it he does not have to pay vat according to revenue.ie. does he pay the uk firm their price incl. uk vat and then does he pay/charge vat on what he sells here. sorry, i am a bit confused about it myself.
    He will pay VAT. He will not be able to write off VAT on expenses versus VAT on sales.

    On the imports, he will have to pay UK VAT in the UK. (If he was VAT regged, he could import the UK products VAT free (I think) and then charge Irish VAT on the sales).

    Regards...jmcc


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    #3
    information
    Closed Accounts Posts: 362 ✭✭information


    If you are a company and you are vat registered, you don't pay VAT.
    You collect it from the customers and give it to the revenue.

    In your friends case,

    A) They are VAT registered.
    They pay €100 for goods no VAT.
    They sell for €242 200+(42 VAT)

    So customer pays €242 for product

    Profit = €242-€42(to revenue)-€100(cost of product) = €100

    B) Not VAT registered
    They pay €117.5 for goods including VAT
    They sell for €230 no VAT

    So customer pays €230 for product

    Profit = €230-€117.5(cost of product) = €112.5

    So if your friend is not vat registered they can sell their product cheaper and make more profit.


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    #4
    j2u
    Closed Accounts Posts: 314 ✭✭j2u


    information wrote:
    If you are a company and you are vat registered, you don't pay VAT.
    You collect it from the customers and give it to the revenue.

    In your friends case,

    A) They are VAT registered.
    They pay €100 for goods no VAT.
    They sell for €242 200+(42 VAT)

    So customer pays €242 for product

    Profit = €242-€42(to revenue)-€100(cost of product) = €100

    B) Not VAT registered
    They pay €117.5 for goods including VAT
    They sell for €230 no VAT

    So customer pays €230 for product

    Profit = €230-€117.5(cost of product) = €112.5

    So if your friend is not vat registered they can sell their product cheaper and make more profit.


    im a little confused?how can he get away with not being vat registered?is it because his friend earns less than 70 k like the poster said.


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