Generix wrote:I'm absolutely lost as to how you are calculating your profit.
Your costs are, exlcuding VAT:
Purchase of goods for resale £392
Freight £8
Commission £23.80
Total costs: £423.80
Income:
Income from sale of goods excluding VAT: £283.34
Total income £283.34
Assuming you meant that the sales price was exclusive of VAT then your total income is still only 340 and you still make a net loss.
Therefore, before even thinking about the VAT consequences you are making a loss.
Are the delivery and commission figures net or gross?
Sorry I did inserted a wrong figure on the sales price. Let me alter it.
"Customer Buys a Television from me for: £440 inc VAT
Im selling on Amazon so i pay a 7% fee: £23.80 (Im sure i can reclaim this as a purchase on my tax returns)
I then buy this tv on behalf of my customer at: £392 EXC VAT (0%)
Delivery Cost is: £8.
That leaves me with a total of £8 Profit.
And yes the delivery and commissions are gross not net profit.
So just how much would I owe HMRC? and how much would I be able to claim back? Im under the belief that I would owe “the difference between input and output VAT Tax” – So would I owe HMRC £88, again I’m real confused. Or do I not charge my customers VAT (im sure I have to as im registered for VAT), In the end im inevitably making losses before I can even think about profits.
Also Thank You so much for helping me out.
