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Do I need to add tax?

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lemmy
lemmy  61671 forum posts United Kingdom
16 Feb 2012 - 8:53 PM

There's nothing even in theory that means you have to register for VAT if you sell even a single picture.

If you consider that you may earn more than 73,000/4 in any quarter you should register. That's it.

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16 Feb 2012 - 8:53 PM

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Tooth
Tooth  95772 forum posts Ireland227 Constructive Critique Points
16 Feb 2012 - 9:02 PM

or if the VAT chargeable on your sales is on average going to be less than the VAT you can claim back from purchases relevant to your business...so you'd be in an overall VAT refund position.

aco012000
aco012000  735 forum posts1 Constructive Critique Points
16 Feb 2012 - 9:11 PM

I do not know about VAT registration or SA, but what you shoukld do is go and talk to someone at your local tax office or at least ring their helpine, details of your nearest office along with helpline numbers can be found on the HMRC web site.
They are the experts so use them we are not ogres in HMRC.

User_Removed
16 Feb 2012 - 11:04 PM


Quote: There's nothing even in theory that means you have to register for VAT if you sell even a single picture.

If you consider that you may earn more than 73,000/4 in any quarter you should register. That's it.

That's maybe a wee bit misleading. It is turnover - not earnings - that matter. Your business may turn over 100,000pa but your earnings after costs might only be 15,000. You would still need to register for VAT.

lemmy
lemmy  61671 forum posts United Kingdom
16 Feb 2012 - 11:41 PM

Yes, you are right, turnover, sloppy of me. I did know that, having been VAT registered in my business. I was working for big companies so it was quite good for me, they could claim the tax I had to charge them back and I could get the VAT on my professional purchases and services back.

It's a pain if you work for private individuals, though since it puts your prices up by 20% and your customers are stuck with it.

Focus_Man
Focus_Man  4481 forum posts United Kingdom631 Constructive Critique Points
17 Feb 2012 - 11:08 AM

The best advice I can give, having been registered for VAT is, if you are working for businesses, then register. You have to charge VAT at the curent rate , but the businesses invoiced can claim the tax back so the extra payable doesn't bother them. The advantage is you can claim back VAT paid on equipment, including cameras (Expensive ones may need to be claimed at a depreciating rate of 25% pa) as well as all consumeables purchased.
The disadvantage is you have to keep your accounts for 7 years and have to pay the tax monthly using old hand-completed forms given to you by HMRC assuming you opt for the 'cash accountancy' scheme which is by far the best option for small businesses.
Working for the public, (Which I did not do) I would think not registering unless you have to because of your turnover,(turnover NOT profit remember!) would prove to be the best option as it keeps your prices to customers down to be better able to compete in that market place where price is so much more important to the client.

lemmy
lemmy  61671 forum posts United Kingdom
17 Feb 2012 - 12:13 PM

I have a awful memories of the VAT inspector coming round and asking to see one petrol receipt from among the cupboard full of receipts I collected. I couldn't find it immediately and her face was like thunder. I knew I kept everything and kept looking - it had stuck the the back of a bigger receipt. It took about 5 minutes to locate and I apologized. She said, "don't apologize, don't lose it next time".

My least popular memory of being self-employed is acting as an unpaid tax collector for the government , the feeling that officialdom sees you as a petty criminal who just hasn't been caught yet andsubject to the rules of regulations of people who have never run an eBay account, let alone a business.

mikehit
mikehit e2 Member 45756 forum postsmikehit vcard United Kingdom9 Constructive Critique Points
17 Feb 2012 - 12:14 PM


Quote: You have to charge VAT at the curent rate ,

To return to the OP, you don't need to charge VAT if payment is made from another country (in this case Germany).

answersonapostcard
answersonapostcard Site Moderator 1012491 forum postsanswersonapostcard vcard United Kingdom15 Constructive Critique Points
17 Feb 2012 - 12:19 PM

Not strictly true, it depends on the source of supply, and it would be worth a call to HMRC to check as its complicated.

Last Modified By answersonapostcard at 17 Feb 2012 - 12:22 PM
loweskid
loweskid  122042 forum posts United Kingdom1 Constructive Critique Points
17 Feb 2012 - 6:16 PM


Quote: I have a awful memories of the VAT inspector coming round ...

My experience with the VAT inspector was exactly the opposite - he was a keen photographer himself and we spent the first hour talking photography, then I left him to it and he was done and away in another hour.... Smile

cats_123
cats_123 e2 Member 103956 forum postscats_123 vcard Northern Ireland24 Constructive Critique Points
17 Feb 2012 - 7:41 PM

it was a trick we learnt...get friendly and people will talk about anything...often opening up avenues for further enquiry...on the other hand he was probably just good at his job Grin

macroman
macroman  1115312 forum posts England
18 Feb 2012 - 11:35 AM

One thing to consider is if using your home for 'business', some/most Councils take a dim view of it and may want to increase your Council Tax.

If you are just selling a few prints as an extension of your hobby then probably no issue, but if you are VAT registered, they might say that you are running a business.

Focus_Man
Focus_Man  4481 forum posts United Kingdom631 Constructive Critique Points
18 Feb 2012 - 4:33 PM


Quote: One thing to consider is if using your home for 'business', some/most Councils take a dim view of it and may want to increase your Council Tax.
If you are just selling a few prints as an extension of your hobby then probably no issue, but if you are VAT registered, they might say that you are running a business.

I doubt if you would be allowed to be VAT registered if you were only selling a few prints, but I am not really sure. The registration documentation that you have to fill in requests assessed turnover etc and so you might face rejection.

For just ober 10 years, I ran a business (Engineering consultancy) from home following redundancy when my place of work was closed down,. (asset stripping take-over of a multi national). I registered my business with Business Link, for a grant of 20pw for 6 months and with IR (as it was then) for tax certification. Some 5 months later I registered with C&E (as it was then) for the cash accountancy VAT scheme because I had passed the turnover level. I was forced to reinvoice my customers for the VAT that should have been charged - but even though I argued that I was not aware at the time that I was likely to exceed then then stated amount, I still had to invoice them. Luckily I chatted about it first to the customers involved. As they were able to reclaim the money back and as they valued my work on their behalf, they complied. Wheww! the C&E as it was then informed me that if the money was not forthcoming, I would be responsible for it myself - nasty!!!!!

I was fortunate and made a lot of money and I suppose even more fortunately my Council tax remained the same. There was a lot of kerfuffle with my accountant as working from home can have many variables, like you can claim proportionate tax relief against electricity and gas bills, similarly against a dedicated room as an office. PCs and printers etc gained immediate full tax relief as costs were below what should be capitalised. I was able to claim line rental and all phone bills as well as full Internet costs. Of course enginner consultants need a camera to record project progress so cameras etc weren be capitalised with a 25% reduction set against tax each year. Apart from that, as has already been mentioned all consumeables were also set against tax.

I forget all the details now, but I was able to claim for furnishing the room I used. More importantly, my wife was able to claim secretarial wages below the rate that qualified for NI & income tax. So if you are going to do it, it is worthwhile doing it properly with advice from an accountant: no need to be afraid of it, but be aware if you fall foul of the rules it can be an awful experience.

Last Modified By Focus_Man at 18 Feb 2012 - 4:34 PM
cats_123
cats_123 e2 Member 103956 forum postscats_123 vcard Northern Ireland24 Constructive Critique Points
18 Feb 2012 - 4:40 PM

vat registrationj is voluntary but HMRC monitor those with low turnovers as sometimes they are used sleepers for later fraudulent activity, so you can expect interest in your activities at some point, but generally6 you would be regarded as low risk and therefore an inspection might not occur for several years. Smile

thewilliam
18 Feb 2012 - 6:07 PM

One member of our old Photographic Society had a big problem with Customs & Excise as it was then. He was a builder and a keen amateur snapper so he bought a Hasselblad against the business for "work in progress" shots.

All was well for a couple of years but like most people who have a nice camera, he was asked to photograph the occasional wedding. One Friday, his VAT inspector made a visit to the business and asking about his Hasselblad, expressed surprise that he had such a good camera for such mundane pix. The photographer was snapping a wedding the following day, the VAT inspector was one of the guests and recognised him. A meeting was set up for the 8am on the following Monday.

The VAT inspector ruled that the snapper had photographed a wedding of the same value every second weekend since the Hasselblad had been purchased and charged VAT accordingly with 100% extra as a penalty. The snapper had no choice but to pay up because he didn't want to face prosecution. The VAT inspector contacted his opposite number at Inland Revenue and he was hit with a bill for income tax.

Last Modified By thewilliam at 18 Feb 2012 - 6:08 PM

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