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Post Info TOPIC: Non Reg VAT company selling to a VAT Reg Company
BMB Barbara


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Non Reg VAT company selling to a VAT Reg Company
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Im new to this forum and was wondering if someone could help me with some VAT questions.

I have recently started my online business and have sold a few bags, not enough to be VAT registerd though.
I have started to approach other online companies to sell my product through their website, however when i go to them with my prices which is a 60/40 split of my profits, they take off their VAT of 20% too. Which eats into their profits. How can i avoid this and am i doing anything wrong?
Also my bag is a mixed supply of VAT products ranging from 0% vat to the full 20%.

Im so confused smile.gif

Thanks in advance
BArbara


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gbm


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Hi Barbara,

What are you selling, and could you please give an example of pricing?

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Nick

Website: www.gbmaccounts.co.uk
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Factsheet | Starting a Business

 
MarkS


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Hi Barbara

Dont see how there is any VAT issuef from your viewpoint if your are not VAT registered.

If you make £100 profit on what you sell you keep £60 and the other company gets £40.

It may be that the other company is treating their £40 as commission received which if they are VAT registered they would need to account for VAT on.  This would make sense as what are they doing?  They are using their website as a forum to sell a 3rd party's goods and they get a cut of the profit for doing this ie commission


So if they are treating £40 as the gross commission they will have to pay a 1/6 to the VATman so only keep £33.33.

Dont see a way round about if you you want to use their website as a medium to sell through but you are the ultimate owner of what is being sold.  You could sell them the goods for them to sell on their website?

MarkS  

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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
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