We are using the VAT margin scheme for memorabilia (second hand goods) we buy and sell.
My question is what we can consider as part of the VAT margin scheme?
For example, we purchase an autograph for £100.00.
Before selling, we frame the item by our framing supplier at a cost of £50.00.
When calculating the VAT margin scheme, can we consider the cost as the total of the two i.e. £150.00 in the example above?
So if the item sold for £300.00, we would pay VAT at 16.67% on the difference between the purchase and selling price, £150.00 VATABLE AT 16.67 = £21.43 VAT payable using VAT margin scheme.
My question is can we consider the framing costs towards the VAT margin scheme or not?
Please note, one of our framers charges us VAT, the other does not. I understand that if we are charged VAT on anything then this is not applicable for the VAT margin scheme however since one of our framers is non VAT on invoices so can this be considered?
Your question is, yet again, asked in the wrong place.
Ask your Accountant. If you haven't got an Accountant, get one and stop trying to freeloader here.
You have been faffing around, still getting things wrong, for weeks now, the money you could've spent on an Accounrant or Vat expert to answer your questions could have paid for itself several times by now.
-- Edited by Casu on Monday 8th of June 2020 11:01:23 PM
I've been watching your posts and my advice is, can you imagine yourself sitting down opposit the bank manager or investors and explaining to them exactly what your business / charity does. Is an experience packages business? is it memorabilia? an art dealer? Second hand goods? All of the above?
You have a limited company acting as a charity with VAT registration but multiple VAT scheme options from which you seem to be looking to pick and choose the most beneficial aspects to create a new VAT model specific to your needs... Or maybe you are not, as I say, the interaction between your threads has lost me, but then I know that we only have a small snippet of the information.
You are quite obviously drowning in the the complexities of VAT and you really need to consider taking on a consultant accountant who knows what they are doing full time for at least a month to really sort out your business as you are making mistakes and I fear that any advice no matter how well intentioned taken from here could be applied out of the intended context as you are buried in the complexities without fully understanding the basics.
You do raise some interesting questions and whilst people here could help you with specific queries I do not think that it would be helping you in the long run.
You should not skimp on the accountant but ensure that you get someone on board who knows what they are doing in order to establish your procedures.
Some of your posts indicate that this is a charity and on occassion people running charities are adverse to spending donation money, or money raised from donated goods on professional help or attempt to get the cheapest possible help under the delusion that it will save the charity money. It won't. it is very much a case of save a penny, lose a pound.
Go to a firm that is large enough that it already has other clients like yours but small enough that the owner / director takes a personal interest in your enterprise.
Normally the first hour is free where they are deciding whether or not you are worth their time. If they take you on they will sort out your VAT issues.
It may be an idea to talk to the owners of other local charities to see which firms they use, whether they would recomend the firm, and get the name of the accountant within the firm who deals with them as so often it is the accountant, not the firm whole that really makes all the difference.
Good luck in your venture. I hope that this response is taken in the constructive manner in which it was intended, but I really don't think that we would be helping you to be answering your questions on here.
kindest regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
we crossed but I think that our responses are complimentary
have a good evening (whats left of it).... Now, is nearly 11:15 too late to be opening a bottle of wine.... Decisions.
All the best,
Shaun.
-- Edited by Shamus on Monday 8th of June 2020 11:13:02 PM
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
10/10 for persistently trying to get unpaid help from professionals who have had to train for years, on several sites, but 0/10 for application of VAT law and a must try much harder for basic maths.
But carry on OP xero will resolve all of your issues, until the tax man comes knocking and they will, at some point. Fines and penalties will make the Accountants fee look teeny.
Hope you enjoyed the wine, if you opened that bottle Shaun.
11.50 am, ie right now, sounds like a good idea to me Riel.
Shauns quote ''You do raise some interesting questions and whilst people here could help you with specific queries I do not think that it would be helping you in the long run.''
Absolutely could help. Absolutely would be willing to help. But there would be a fee involved. Because my expertise doesnt come cheap.
(Oops - started this a while ago, ended up on a call.)
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Well, I shared the sentiment about the wine and on the grounds that time has zero meaning anyway at the min (whatever one of those is) the wine was indeed opened and finished before bed . Many thanks to John and others for the Friday / weekend fun threads... Joanne, "hello Clarice" had me in stitches.
I'm awaitng the OP's response in this thread. They will not be permitted to ask further accountancy related questions until they have taken on suitable representation to guide them out of this quagmire that they have skipped merrily into. Under the guidance of an accountant (maybe someone here... not it) maybe they can develop their skills and perhaps expand their knowledge base via AAT or ATT. The key though is that from reading their threads they really do need paid help before their business / charity ends up a statistic.
All the best people,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hello all and thanks for your replies. From my understanding this forum can offer general advice on accounting and book keeping and this was listed inside the VAT, Payroll & Tax section which I do think is the right area.
Nevertheless I understand the reason for your replies and cause for concern regarding an accountant. We actually have an accountant but they tend to be overwelmed with such questions as they are not an area they have dealt with before.
As it is such a specialist area my accountant cannot answer the questions right off the bat, so I felt that seeking advice from others here would be a good turn.
We only recently become vat registered thus trying to account for this properly for future sales. I would appreciate any advise rather than saying get an accountant as we already have one.
There is no information online regarding my query on VAT Margin Scheme as the gov uk website does not detail any information on this.
Are there any other places you would suggest reaching out to for sufficient advice? We can ask the enquiry to HMRC but I'm not sure they will be able to give straight forward answer.
This is the wrong place to ask because it is for professional people exchanging information. Ie not for business owners trying to do their own books. You stated on an earlier post you were doing your own bookkeeping AND accounting.
Its certainly good to hear that you have got an Accountant. BUT...
I would urge you to find an Accountant who will not be overwhelmed by such queries, one who can do the necessary handholding for businesses setting their stalls out as you are with all your fingers in your piese, because otherwise this will come back to bite, big time.
Its not even difficult stuff to someone who has undertaken their professional training. So I do wonder what qualifications your Accountant has?! Shaun's commentary about the type of practice that you should seek out is highly relevant to you, given the right size of practice would ensure there is sufficient cover of staff to aid you. That said, Im a one woman practice and provide handholding to all my clients as required, so fail to see why your Accountant is not helping - that is NOT the way I do business. I deal with several margin scheme and other VAT scheme clients.
One thing I would say - never ever rely on ringing HMRC for answers, they often get it wrong ( think minimum wage staff with no accountancy/no tax training and think of all the tribunals they actually lose because their information is wrong, which is also why you shouldnt rely on their 'guidance' - it is just that. Guidance, not law. The legislation is what needs to be looked at.
If you do not wish to change Accountants (Ive no idea why you wouldnt) then I would happily recommend a VAT expert, who can set you on the right path. A great bloke, knows his stuff.
Where are you based?
-- Edited by Cheshire on Tuesday 9th of June 2020 02:53:44 PM
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Oh and we cannot/do not give tax/VAT/business ADVICE on this forum - that can only be freely given and received with an Engagement Letter in place between the two parties.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
OP - why do you think we would assist you for free?
Genuine question, can you please answer?
Do you think I could ring up a plumber and get him to fix my leaky tap for free? Do you think I could ring up a lawyer and get free advice on how to divorce my husband? Someone who has trained for years to gain the knowledge that they have. Why do folk think it is ok to ask Bookkeepers and Accountants for free advice?
Oh, Ive just twigged why you think it is ok - because you have a muppet 'accountant' who perhaps should not be proferring their services. Mind you, if they havent got much experience in this area, they should be buying in that expertise to assist you, referring you on to someone who does, speaking to their tax helplines or frankly dis-engaging you so you can find someone who can help.
Agree totally with you Caron in that the accountant has to be a good fit for the business.
It should have been the accountant who advised on the VAT approach to be adopted before it was actioned where it seems that the VAT scheme was adopted without their input and Jennifer is now lost in conflicting information whilst the accountant is letting the business flounder.
Two reasons for that spring to mind, firstly if the business is on a fixed fee arrangement then change the basis on which those fixed fee's were calculated (such as adding VAT complexity). In such instance increased involvement would require increased fee's but busnesses are often reluctant to accept increased fee's no matter how they move the goal posts.
The other is where the accountant fundamentally disagree's with what the client has done. In such instance I would disengage but some accountants are a lot more adverse to losing fee income so may go for a somewhat unprofessional approach of letting a client feel the pain of the mess they created.
The really unprofessional approach would be ensuring that the client had investigation insurance then wait for the phone to ring. Not suggesting thats happening here but as Joanne states, it woud be interesting to know what letters the accountant has after their name.
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
. Many thanks to John and others for the Friday / weekend fun threads... Joanne, "hello Clarice" had me in stitches.
