Being employed and registering for VAT

#1 CreativeShelf

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Posted 08 January 2012 - 02:17 PM

Hello guys,

I am currently employed by an electronics company and am looking to start up a website distributing products however I need to be VAT registered in order for this to be possible.

If I sign up to become VAT registered, what can I expect to happen?

Does it affect my wages at the end of the month even if I'm not earning anything from the new venture?

Many thanks,
Jake

#2 zed

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Posted 08 January 2012 - 03:01 PM

VAT will have nothing to do with your earnings/wages. As a sole trader/company you will charge customers VAT on sales and reclaim it on purchases. For this you will need to register and fill in a quarterly return and will have to whether you sell anything or not.

http://www.hmrc.gov.uk/VAT/

You should also register with HMRC that you're going to self employed, in part, to make money from the website. Give them a call and discuss it with them and get the proper advice from the horse's mouth.

#3 MikeChipshop

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Posted 09 January 2012 - 08:19 AM

[moved to 'business and legal']

#4 Sinero Web Design

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Posted 01 February 2012 - 11:38 AM

Unless you have a turnover on sales on "taxable products" of over £70,000 or something you don't need to register. If you purchase a lot of goods that have VAT included on the invoice it might be worth registering to recover these costs but as developers and designers I don't think their would be much VAT to recover so I would say avoid it if possible. VAT registered companies have more liability and costs than sole traders which means your prices would have to be increased by 20%.