-
If the sole trader is registered for VAT, as HMRC have stated, sales thereafter are subject to VAT/normal VAT rules (ie, some sales might be zero rated if goods are exported from the UK to overseas customers and some supplies might be zero rated if the sole trader is selling childrens clothing or basic foods like bread and milk), otherwise, the sole trader should have been collecting VAT from customers on each sale made.
In situations where a VAT registered trader has failed to charge VAT, you would treat sole trader income as gross and extract VAT from the gross turnover and that is declared to HMRC on the outstanding VAT returns. For example if turnover for the year was £100,000 then to find the VAT you multiply by 1 and divide by 6 (£100,000 x 1 / 6 = £16,666 VAT due to HMRC). On the personal tax side, there is an overstatement of income/profit (reflecting the £16k of VAT going to HMRC), so there would likely be a reduction in personal tax liability which might offset some of the VAT liability.
If you submit Nil VAT returns knowing sales have been made that are subject to VAT, this would be a deliberate submission of a knowingly inaccurate return and the penalties can be between 20%-70% of the VAT not declared (so the VAT not declared plus a further 20%-70% penalty).
-
Some printed matter is zero rated regardless of whether the goods are exported from the UK or not (books, magazines, newspapers, etc).
Assuming that the printing you have supplied is not naturally zero rated (diaries, etc), then the supply is standard rated. The place of supply for goods is where they are at time they are supplied (UK) and you can only zero rate if you export the goods outside the of the UK.
You can only zero rate goods when you have proof of export - https://www.gov.uk/hmrc-internal-manuals/vat-exports-of-goods-from-the-uk/vexp30400
Also this link section 6 https://www.gov.uk/guidance/vat-on-goods-exported-from-the-uk-notice-703#sect6
You will not have any proof of export if you have delivered the goods to a UK address. Even if the customer intends to export those goods to Israel later on (under Groupage rules, see section 7.5), you don't have the proof that they have or will do this unless you have a contractual term that requires the customer to give you proof of groupage export if they want to have the supply zero rated.
If you had a VAT inspection and HMRC asked you for proof of export, you haven't got anything, HMRC would then likely assess you for the VAT that you failed to charge.
-
Go into your government gateway for VAT and go to bank details section, you can add bank details for refunds, so future refunds will go direct to the bank account.
For the cheque you have now, you need to write to HMRC and send the cheque back, asking them to cancel it and make the refund to your bank account (which you have now set up via your gateway).
Address to write to is HMRC, VAT 3 unit, DMB 613, BX5 5AB.
-
Are you sure that your watches are eligible to be sold under the 2nd hand margin scheme?
When the goods enter the UK, they will be subject to import VAT, because the goods you have purchased have been charged with VAT, then they can't be margin scheme supplies. Brexit kind of messed with margin schemes a lot. Check this link first https://www.gov.uk/hmrc-internal-manuals/vat-margin-schemes/vatmarg07000
Also this link https://www.gov.uk/vat-margin-schemes/eligibility
"Antiques and collectors’ items - Antiques are goods that are over 100 years old. Collectors’ items are stamps, coins and currency and other pieces of scientific, historical or archaeological interest. Not all items that can be collected are eligible for a margin scheme."
So it might be that your watches are classified as antiques, or maybe not, depends on the shipping paperwork the seller sends with the watch and how DHL interprets that paperwork.
If DHL are doing the shipping, if DHL know your GB VAT number, they are probably declaring the import VAT to your postponed import VAT Account, so that all you see from DHL is their import duty recharge and their service/shipping fee. With postponed import VAT, the courier (DHL) does not need to pay the import VAT on day of import (they do have to pay the import duty on the day), instead, the courier can assign the import VAT liability directly to your VAT number and you have to access the monthly import statements via your government gateway and account for this VAT on your VAT return.
To access postponed VAT statements you first have to register for CDS, use this link here to register for it and then use same link to access your monthly postponed import VAT https://www.gov.uk/guidance/get-your-postponed-import-vat-statement
-
https://www.gov.uk/government/publications/revenue-and-customs-brief-7-2021-vat-liability-of-charging-of-electric-vehicles/revenue-and-customs-brief-7-2021-vat-liability-of-charging-of-electric-vehicles Why are EV drivers unable to obtain a receipt? When I charge my car at a public charger, I can get a receipt. Different charger networks have different rules. It should be much easier than it currently is but I guess the EV network is still in the developing stage.....try getting a VAT receipt from Amazon, just as painful but an email order confirmation is not a VAT invoice, you have to go into your order and request a VAT invoice, etc.
[External link removed - Admin]
-
No need to worry, when paying by direct debit, HMRC will check that on the 7th of the month that i) you've filed your return on or before the 7th and ii) that you've an active direct debit setup. If that is the case, HMRC will request funds around 3-4 days AFTER the 7th deadline (depending upon weekend/bank holiday).
Your payment is not late and there is no penalty. It's not 5 days late, it is three working days later.
Link here https://www.gov.uk/pay-vat/direct-debit
"Once you’ve set up the Direct Debit, payments will be collected automatically from your bank account 3 working days after the payment deadline on your VAT return. If you file your VAT return late, your payment will be taken 3 days after you file the return."
-
The customer pays the VAT to you when the customer buys a drink or snack. If you cannot afford to pay HMRC the VAT (that you collected from the customer), then this means you have spent the VAT on something else. Most business will ringfence the VAT they have collected from their customers so that there is no temptation to spend the VAT on something else, the VAT belongs to HMRC.
Whether you charge £1.20 for a coffee or £2.40 the price includes the VAT element that the customer pays to you and you pay to HMRC. VAT should just pass through the business. Under the flat rate scheme, you charge the customer 20% VAT but pay over to HMRC a flat rate of 12.5%. For example, you sell a coffee for £1.00 + 20p VAT (total £1.20), the £1 is your sale/turnover and the 20p belongs to HMRC but under the flat rate scheme, you would pay over 12.5% of the gross sale, the gross sale is £1.20 so £1.20 x 12.5% = 15p. In this example you receive £1.20 from the customer, you pay over 15p VAT to HMRC and you keep the difference (5p) plus the £1.00 (£1.05 in total).
Q1. You will not be able to deregister whilst you have outstanding VAT return/VAT liabilities owed to HMRC else, you can only deregister when your rolling 12 month turnover goes below £83,000 or if the business ceases to trade. If/when you cease to trade or deregister, you may also have to pay output tax on the value of any stock, assets or goods on hand at time of deregistration. As a sole trader unable to pay their VAT liability, speak to HMRC time to pay/debt management team to see if you can set up a payment plan.
https://www.gov.uk/difficulties-paying-hmrc/pay-in-instalments
Once you are on the FRS, you can remain on it until your turnover exceeds £230,000 see section 11 here https://www.gov.uk/guidance/flat-rate-scheme-for-small-businesses-vat-notice-733--2#leaving-the-scheme and also note that the £230k test is an annual test done on your anniversary of joining the flat rate scheme (same link section 12.3) and also note that once you leave the FRS scheme, you cannot rejoin it for 12 months.
-
HMRC are correct and I think you may be misunderstanding the transaction flow when an overseas supplier sells via Amazon/online marketplace.There are two sales :
1. First you (as supplier) sell the goods to Amazon/Online MarketPlace. That sale is zero rated (You to Amazon) as per "When the goods are sold to the customer, the overseas seller will be considered to have made a zero-rated supply of the goods to the online marketplace, known as a ‘deemed supply". This is stage one.
2. Second, Amazon makes the sale of those same goods to the end customer, that sale is whatever the VAT rate is and Amazon accounts for the VAT on that sale (Amazon to customer). The guidance states "Any sales a seller makes through an online marketplace, where the online marketplace is liable to account for the VAT, will not be included in the Flat Rate Scheme calculation from 1 January 2021."
This is stating that the sales that are made by Amazon/online marketplace are not your sales, so you do not need to include the value of the sales Amazon makes under your flat rate scheme calculation. But you still make a sale of the goods to Amazon first and it is that sale, zero rated, which is subject to VAT under the flat rate scheme.
It is unwise to operate flat rate scheme because i) you have to declare VAT on the zero rated sale you make to Amazon and ii) you cannot reclaim import VAT when the goods are imported into the UK. When goods enter the UK they will be subject to import VAT, your freight agent might default to using Postponed Import VAT Accounting (PIVA) and you may not even be aware that import VAT has been postponed/not paid by freight agent when the goods cross the UK border. You may discover that you have import VAT that you are unaware that you have to declare on your flat rate VAT return (see link below, section 6.5)
https://www.gov.uk/guidance/flat-rate-scheme-for-small-businesses-vat-notice-733--2
To answer your question, you do not need to include the transactions "TAX-COLLECTION-RESPONSBILITY_MARKETPLACE" in your FRS calculations as those sales are made by Amazon/Marketplace, but you do need to include the value of the deemed supply from you to Amazon in your FRS calculation and pay whatever your flat rate percentage is.....this is bad, you are declaring a flat rate percentage of VAT to HMRC on the sales you make to Amazon, those sales are zero rated so you are not collecting any VAT from Amazon but paying over a % to HMRC (ie, you zero rate sale to Amazon for £100/no VAT, Amazon pay you £100/no VAT, you declare say 6% of the gross, so you are paying £6 VAT to HMRC out of the £100 you received from Amazon.
You may need to consider if the flat rate scheme is the right scheme for you,
This is
-
When you say you tried deregistering using the online form, is that the form you access via government gateway/VAT portal or the generic deregistration form you can fill in and email to vrs.newregistrations team?
One route might be to setup a gateway for the VAT number you want to deregister and once you access your government gateway there is a menu option to cancel your registration. Cancel it through the gateway might be better than sending an email form.
The other problem you might be having is that you cannot usually deregister when you have outstanding VAT returns and so you might be being rejected from cancelling because you've outstanding returns, in theory, only your duplicate VAT number should have outstanding returns, your other VAT number is your legitimate number and so you should be filing VAT returns as normal.
There is also a number for the de-registrations team, although like most HMRC helplines, they are often engaged/busy and so you need to keep calling until you get through to someone, the de-registrations team number is 0300 322 7871.
There was a small batch of VAT registrations that got duplicated back in early 2022, as I had a couple of these myself and so my clients filed VAT returns on time and paid their VAT liabilities on time using one of the VAT numbers and they deregistered the other VAT number but that process did take a couple months but back in 2022 we were recovering from Covid as a Country and so there was a backlog at HMRC.
My clients used only one VAT number on their invoices and acted like the duplicate VAT number never existed, so make sure your invoices shows one VAT number only, file your returns using that one VAT number and in time you will get the duplicate number cancelled and that will then leave you in the position like the duplicate never existed you will just end up with your single VAT number, filing returns, etc.