VAT rule change

[Banners]

I became VAT registered a few years ago. The VAT is never your money to begin with, so it's not like you're losing anything directly. The issue is that, in the example of the 99p eBook from above, the price becomes £1.19 which may make it uncompetitive and therefore force you to have to lower your net price.

The accounting side is a pain. You can spend hours doing a VAT Return for the eventual difference between what you owe and what you can claim back to end up as mere pennies.

So the downside of being VAT registere is your prices go up by 20% for regular consumers, or you have to reduce your net price accordingly.

The upside is that you become 20% cheaper for other VAT Registered clients, making you more competitive for B2B sales. Also, almost everything you buy becomes 20% cheaper which means in some cases you can reduce your price but increase your margin.

[TordelBack]

Also, almost everything you buy becomes 20% cheaper which means in some cases you can reduce your price but increase your margin.

The problem always seems to be in products/services where the primary input is your own labour , rather than materials, fuel, consultants etc. (hence the penalty for digital creative types), particularly where your clients are private individuals.  It can be very hard to achieve any kind of a balance between the VAT you're paying and the VAT you're saving.  Plus, as Banners says, the book-keeping is time consuming, especially if different services you offer are at different VAT rates (when I dig holes it's at 13.5%, but when I watch someone else dig holes or write about digging holes it's 23%, -sigh-).  I'm perversely happy to find myself well below the VAT threshold (37.5K) this year. 

Fun VAT fact of the day:  In the RoI bottled water is charged at the 23% VAT rate, but bottled water with the magic words 'Homeopathic Remedy' on the side is charged at 0%. 

[The Legendary Shark]

So, can't you become a homeopathic hole handler?

[The Enigmatic Dr X]

So, can't you become a homeopathic hole handler?

Only in Amsterdam, Shark. Only in Amsterdam.

[Jim_Campbell]

The accounting side is a pain. You can spend hours doing a VAT Return for the eventual difference between what you owe and what you can claim back to end up as mere pennies.

Yeah, the accounting side of VAT is a bit of a pain (my wife is a VAT accountant — I know a bit about this) but, as you say, can work to the advantage of some businesses (although not mine, since I have zero inputs and lots of outputs).

It's the additional, ludicrous admin burden the new rules place on businesses: for example, two independently verifiable proofs of country of residence for every customer, to be held on file for ten years? Fuck, as they say, that.

Cheers

Jim

[The Legendary Shark]

"Fuck, as they say, that"? Is that a law you're going to ignore, Jim? *evil grin*

[Jim_Campbell]

"Fuck, as they say, that"? Is that a law you're going to ignore, Jim? *evil grin*

Doesn't affect me, but if it did I'd simply stop trading with non-UK customers.

Cheers

Jim

[The Legendary Shark]

Ah, I took it to mean you needed proof of residence for all your customers, foreign and domestic.

[Richard]

That's completely nuts. And the Tories pretend they are on the side of small businesses.

[Old Tankie]

It hasn't come from the Tories, it has come from the EU and, surely, there are many creative types that it doesn't affect.  Artists and writers, or anybody else, who sell their services to a company/publisher/organisation, are not affected by this at all, as I understand it.

[Jim_Campbell]

It hasn't come from the Tories, it has come from the EU

Where we have MEPs and are democratically represented. Except for our UKIP MEPs, who are happy to stick their snouts in the EU trough but don't actually fucking vote on anything and don't even turn up half the time.

My point is that while Cameron has been posturing over the non-issue of EU immigration, this piece of idiocy has become law and the Tories could more productively have used their time engaging with other EU countries on this issue and getting our MEPs and their MEPs to vote it down, or modify it into something more sensible.

surely, there are many creative types that it doesn't affect.  Artists and writers, or anybody else, who sell their services to a company/publisher/organisation, are not affected by this at all, as I understand it.

There are loads of people it doesn't affect. However, there are many micro-businesses which will face a fairly onerous admin burden unless they either cease trading completely, or restrict their activities to their own country.

Cheers

Jim

[Old Tankie]

But as well as posturing over EU migrants, how do you know that at the same time they weren't trying to deal with this?  The UK along with other countries get out-voted many times on various regulations.  I don't know what the UK's stand was on this subject.  There are literally dozens and dozens of EU regulations passed every working day.  I don't know what ones the UK agrees with and what ones they don't.

To me, this seems like a daft rule but even good rules affect some people in an adverse way.  With regulations there are always winners and losers.

[The Legendary Shark]

Yeah - the same old winners and the same old losers.
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I'm sorry.
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I'm going to vacate this thread before I spoil it with all my "tax is theft" rhetoric. This thread is obviously meant to help people figure it all out and comments like mine won't be helping.
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Sorry again.
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*slinks back to TPT*

[Ghastly McNasty]

Stupid tax rule is a real kick in the balls for the good ship Comicsy and all those who sail upon her. Still deciding what step to take next. It's gonna hurt, whatever it is.

[Professor Bear]

Comicsy has utilised Paypal whenever I've shopped there, so surely this shouldn't affect them?