VAT on postage and childrens clothings

UK Discussion in 'Individuals' started by Bertie2k, Jun 19, 2018.

  1. Bertie2k

    Bertie2k

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    Hi all,

    I have looked every where for the answer to this and I am no better off than I was 12 hours ago. A sole trader purely selling second hand childrens clothing on ebay is interested in going VAT registered, reason being is the items being sold are zero rated, the Whistl delivery, postage bags, labels, ink etc are all vatable, reading about postage vat has made my head hurt, I understand completely about charging VAT on postage and in this case you would not be charging VAT on the postage as the liability on the products are zero. However there is no definitive answer on whether you can claim VAT on the deliveries, does anyone know if you can or not. In my head you can because you have been charged it but because everywhere goes on about the VAT being the same as the products sold, does this mean you cant claim it back as that VATable purchase of delivery is now turned zero rated? The postage is offered free to the customer so if the item sells for £10 the seller pays the £2.95 or whatever it is and make 7.05 less ebay fees etc

    Any help would be brilliant

    Thankyou
     
    Bertie2k, Jun 19, 2018
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  2. Bertie2k

    Becky Administrator

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    If VAT has been charged, then it can be reclaimed if it does not relate to a VAT exempt supply, but not all postage services are subject to VAT.

    Check out the guidance here: https://www.gov.uk/guidance/rates-o...publications---books-magazines-and-newspapers

    The easiest way to find out is to look at the receipt / invoice - if VAT has been charged then it can be reclaimed.

    If it falls within the category of 'Postage, packing and delivery within the UK included in the sales contract but charged for separately' then the vendor should charge the same rate as for the goods to which it relates. It's important to remember that these are two separate transactions.

    e.g. The vendor has puchases the delivery service and pays VAT for it, which they can reclaim (and if they haven't paid VAT then they cannot reclaim it). They then sell the delivery service to the purchaser and charge VAT at 0% because that's the same rate as the goods. Does that make sense?

    In addition they need to consider the burden of filing VAT returns, inspections, etc.
     
    Becky, Jun 20, 2018
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  3. Bertie2k

    Bertie2k

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    That makes sense, its all third party courier service by Whistl so VAT is charged to us, we will be set up on ebay as VAT registered so the sales invoicing will be taken care. It is purely to save money as we offer free p&p, nothing we sell is vatable and everything we buy is vatable so it just makes sense to be VAT registered, sending out 500 parcels a month sometimes more costs alot of postage and VAT. All previous items were sent by royal mail so no backdating required
     
    Bertie2k, Jun 20, 2018
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