coffeedrinker
New member
I have a business selling second-hand clothes on eBay which regrettably sailed past the £85,000 threshold a couple of months ago without me even realising that this threshold existed! Totally foolish on my behalf and I take full responsibility for not educating myself earlier on the issue.
Regardless, I now have a tricky situation to deal with. My intention is to apply to HMRC with evidence that this was due to a temporary spike in sales (I had a massive pile of stock saved up to list when I graduated univeristy in the summer). With any luck this will mean I don't have to permanently register for VAT. This leaves me with the 14 months or so of sales that I now need to pay VAT on.
Unfortunately, as a significant chunk of this stock was purchased from charity shops and car boot sales there are no paper receipts for the purchases. I do, however, have all records of purchases on my bank statements. For my self-assessments up to now I have just subtracted expenses from my income within the tax year as opposed to accounting on an item-by-item basis. I now have approximately 1,000 items to individually account for from this period! This leaves me with a handful of questions that it would be great to get some feedback on:
- Does the VAT declaration absolutely have to be on an item-by-item basis or can I use net sales minus net purchase price during the 14 months and then pay 16.6% of that figure?
If not
- Will I be able to use the VAT margin scheme for second-hand goods to account for sales in these 14 months even if I don't have solid paper receipts?
- Just to clarify - do you pay VAT on every sale up to, including and after the £85,000 rolling 12 month period or just once you pass it?
- Is everything going to be okay?
- I visited a local accountant and they quoted £210 per hour for detailed accounting advice - shall I just bite the bullet and pay or can this be done myself or cheaper elsewhere (I am very keen to learn lessons for future)?
Any responses will be greatly appreciated, thank you so much for taking the time to read.
Regardless, I now have a tricky situation to deal with. My intention is to apply to HMRC with evidence that this was due to a temporary spike in sales (I had a massive pile of stock saved up to list when I graduated univeristy in the summer). With any luck this will mean I don't have to permanently register for VAT. This leaves me with the 14 months or so of sales that I now need to pay VAT on.
Unfortunately, as a significant chunk of this stock was purchased from charity shops and car boot sales there are no paper receipts for the purchases. I do, however, have all records of purchases on my bank statements. For my self-assessments up to now I have just subtracted expenses from my income within the tax year as opposed to accounting on an item-by-item basis. I now have approximately 1,000 items to individually account for from this period! This leaves me with a handful of questions that it would be great to get some feedback on:
- Does the VAT declaration absolutely have to be on an item-by-item basis or can I use net sales minus net purchase price during the 14 months and then pay 16.6% of that figure?
If not
- Will I be able to use the VAT margin scheme for second-hand goods to account for sales in these 14 months even if I don't have solid paper receipts?
- Just to clarify - do you pay VAT on every sale up to, including and after the £85,000 rolling 12 month period or just once you pass it?
- Is everything going to be okay?
- I visited a local accountant and they quoted £210 per hour for detailed accounting advice - shall I just bite the bullet and pay or can this be done myself or cheaper elsewhere (I am very keen to learn lessons for future)?
Any responses will be greatly appreciated, thank you so much for taking the time to read.