Think I have been doing this completely wrong!

[virtues2011]

If you could edit your prices out and PM instead. your not allowed to post prices

What difference does it make... It's in their brochure. If someone wants to filter it out - good for them. Personally I'll take the wrap and get over myself! :biggrin:

 

[Jen889]

What difference does it make... It's in their brochure. If someone wants to filter it out - good for them. Personally I'll take the wrap and get over myself! :biggrin:

I was just mentioning for friendly-advice really. some geeks get all up in knots about the prices because it's a public forum and clients can see prices.

 

[virtues2011]

I was just mentioning for friendly-advice really. some geeks get all up in knots about the prices because it's a public forum and clients can see prices.

Then that's fine..and i'm pretty sure some jobsworth will filter it out, it will give them something interesting to do...! I don't have the time to give much thought to it personally. I was purely helping answering a question and what a client is going to argue about with a bottle of remover for £xx is beyond me!

 

[TPB]

I doubt most public will understand what it is anyways?

 

[hazeleyes]

Popped back in to see how you were getting on....glad all the advice helped you. I have just looked at the S2 brochure...250ml D-Sperse = £xx....as I haven't ordered from them I believe you may have to add VAT onto this so total cost will be £xx. Unless you are VAT registered (which I doubt you are) make sure your figures all include the VAT amounts, as you can not claim them back you must suffer the extra cost of VAT on your purchases to get a true figure..

Can I hi jack the thread and just ask about the VAT issue. So large businesses with 70k turnover don't pay VAT business to business right? but people buying goods or services from said businesses are charged vat still?

So how do the companies "claim it back"? I've always wondered this....

 

[TPB]

Can I hi jack the thread and just ask about the VAT issue. So large businesses with 70k turnover don't pay VAT business to business right? but people buying goods or services from said businesses are charged vat still?

So how do the companies "claim it back"? I've always wondered this....

I would be happy to listen to this as well, just to be educated, i always steered away from those topics, but i am also curious.

 

[Lynne Baker]

It's not just B2B.
I'm VAT registered which means I have to charge every customer, trade or retail, VAT.
I merely act as a tax collector for HMRC. Sometimes I can claim VAT back, if I've bought more than I've sold. Any business owner will tell you that this is A Very Bad Thing. If I've bought more than I've sold it means I'm not profitable!
How it works in practice is this:
I buy products from say S2 and I pay £25 in VAT.
I sell product to customers and they pay me £25 in VAT.
The revenue allows me to reclaim the VAT I've paid, but they want the VAT my customer has paid.
£25 paid out
£25 paid to me
=£0

Now, if I've paid that same £25 in VAT, but my customers have bought loads of products and paid £50 in VAT that means that there is £25 that the revenue wants.
So, at the end of a VAT quarter I have to do a VAT return where I detail what I've bought and what I've sold.
If I've taken more than I've spent then I pay the difference to the revenue.
Does that all make sense?!

 

[TPB]

It's not just B2B.
I'm VAT registered which means I have to charge every customer, trade or retail, VAT.
I merely act as a tax collector for HMRC. Sometimes I can claim VAT back, if I've bought more than I've sold. Any business owner will tell you that this is A Very Bad Thing. If I've bought more than I've sold it means I'm not profitable!
How it works in practice is this:
I buy products from say S2 and I pay £25 in VAT.
I sell product to customers and they pay me £25 in VAT.
The revenue allows me to reclaim the VAT I've paid, but they want the VAT my customer has paid.
£25 paid out
£25 paid to me
=£0

Now, if I've paid that same £25 in VAT, but my customers have bought loads of products and paid £50 in VAT that means that there is £25 that the revenue wants.
So, at the end of a VAT quarter I have to do a VAT return where I detail what I've bought and what I've sold.
If I've taken more than I've spent then I pay the difference to the revenue.
Does that all make sense?!

If i understood right, it sounds pointless and not worth getting into? lol

 

[virtues2011]

Can I hi jack the thread and just ask about the VAT issue. So large businesses with 70k turnover don't pay VAT business to business right? but people buying goods or services from said businesses are charged vat still?

So how do the companies "claim it back"? I've always wondered this....

Anything you buy that is VAT (20%) applicable you will be charged for regardless of the VAT threshold which is 79k at the moment, this changes yearly. Every time you by a nail polish there will be a VAT element of 20% included in the total price.

If your turnover reaches this threshold you have to by law register for VAT. You can also voluntarily register for VAT under this threshold but personally I wouldn't.

I will give you some examples it may make it easier to understand - someone that is not VAT registered.

You buy £40k worth of supplies for your salon in a quarter. (the VAT amount will be included in this figure as everyone has to pay VAT)
Your turnover (sales) is £30k a quarter
It tells you immediately that you are buying more than you are selling so potentially you could have a problem. The VAT amount needs to be calculated in your treatment prices as you can not claim the VAT back from the Government as you are not registered.

Someone that IS VAT registered over the threshold of 79k
You purchase £80k worth of supplies for your salon per quarter.
Your turnover is £120k per quarter your prices for services will incur the 20%.
These figures are given to the Government each quarter through the Government Gateway portal, it used to be manual on a form but they done away with this.
As a rule of thumb if you buy more than you sell you receive a refund from the HMRC of the difference.
However if you sell more than you buy you have to pay them the difference.

This is why to volunteer to pay VAT you have to be very careful, as if you sell 20k worth of services and you buy 5k of products you will have to pay the difference to the HMRC - so not good.

There are also different levels of VAT accounting that you can do but these are in depth and it is something along the lines of every purchase must be over 2.5k and then you pay 14% (I think) but don't get bogged down with this too much....the same if you are selling overseas the EC sales lists come into play.

 

[hazeleyes]

It's not just B2B.
I'm VAT registered which means I have to charge every customer, trade or retail, VAT.
I merely act as a tax collector for HMRC. Sometimes I can claim VAT back, if I've bought more than I've sold. Any business owner will tell you that this is A Very Bad Thing. If I've bought more than I've sold it means I'm not profitable!
How it works in practice is this:
I buy products from say S2 and I pay £25 in VAT.
I sell product to customers and they pay me £25 in VAT.
The revenue allows me to reclaim the VAT I've paid, but they want the VAT my customer has paid.
£25 paid out
£25 paid to me
=£0

Now, if I've paid that same £25 in VAT, but my customers have bought loads of products and paid £50 in VAT that means that there is £25 that the revenue wants.
So, at the end of a VAT quarter I have to do a VAT return where I detail what I've bought and what I've sold.
If I've taken more than I've spent then I pay the difference to the revenue.
Does that all make sense?!

Right,
So VAT you have paid can be reclaimed? As in not paid to the inland revenue at the end of the VAT quarter? For instance for services? You buy a product from s2 for £25.00 say nail polishes for your clients. Your not physically selling that on as it's a service? So you just reclaim the VAT back at the end of the quarter? But how?

 

[virtues2011]

It's not just B2B.
I'm VAT registered which means I have to charge every customer, trade or retail, VAT.
I merely act as a tax collector for HMRC. Sometimes I can claim VAT back, if I've bought more than I've sold. Any business owner will tell you that this is A Very Bad Thing. If I've bought more than I've sold it means I'm not profitable!
How it works in practice is this:
I buy products from say S2 and I pay £25 in VAT.
I sell product to customers and they pay me £25 in VAT.
The revenue allows me to reclaim the VAT I've paid, but they want the VAT my customer has paid.
£25 paid out
£25 paid to me
=£0

Now, if I've paid that same £25 in VAT, but my customers have bought loads of products and paid £50 in VAT that means that there is £25 that the revenue wants.
So, at the end of a VAT quarter I have to do a VAT return where I detail what I've bought and what I've sold.
If I've taken more than I've spent then I pay the difference to the revenue.
Does that all make sense?!

Sorry Lynne I didn't realise you were answering - It took me ages to write that so I didn't see the response from you...WE ARE purely tax collectors you are correct!

 

[Lynne Baker]

If i understood right, it sounds pointless and not worth getting into? lol

I have no choice. Our turnover is way over the £79k pa level that the government sets.

 

[Noodle]

i'm pretty sure some jobsworth will filter it out

That'll be me then, and I have

As has been said above, we do not post trade prices or detail specific costings on this site.

..now back to the thread please.

 

[TPB]

I have no choice. Our turnover is way over the £79k pa level that the government sets.

Yea i understand that. I doubt id be anywhere near that I struggle making 5k a year from a part time job :/.. But glad i listened.

 

[Lynne Baker]

Right,
So VAT you have paid can be reclaimed? As in not paid to the inland revenue at the end of the VAT quarter? For instance for services? You buy a product from s2 for £25.00 say nail polishes for your clients. Your not physically selling that on as it's a service? So you just reclaim the VAT back at the end of the quarter? But how?

I have to charge VAT on the services too.
I use a software system called Sage. It's connected via the net to the revenue's system, and they have my business bank account details too.
So, once I submit my return electronically, the revenue tell me how much VAT I must pay them, or how much of a refund I'm due. They take the money from me via a direct debit, or they pay my refund into my account.

 

[virtues2011]

That'll be me then, and I have

As has been said above, we do not post trade prices or detail specific costings on this site.

..now back to the thread please.

Well I had to give you something to do....ha ha .....yes I know I get it!:biggrin:

 

[hazeleyes]

Anything you buy that is VAT (20%) applicable you will be charged for regardless of the VAT threshold which is 79k at the moment, this changes yearly. Every time you by a nail polish there will be a VAT element of 20% included in the total price.

If your turnover reaches this threshold you have to by law register for VAT. You can also voluntarily register for VAT under this threshold but personally I wouldn't.

I will give you some examples it may make it easier to understand - someone that is not VAT registered.

You buy £40k worth of supplies for your salon in a quarter. (the VAT amount will be included in this figure as everyone has to pay VAT)
Your turnover (sales) is £30k a quarter
It tells you immediately that you are buying more than you are selling so potentially you could have a problem. The VAT amount needs to be calculated in your treatment prices as you can not claim the VAT back from the Government as you are not registered.

Someone that IS VAT registered over the threshold of 79k
You purchase £80k worth of supplies for your salon per quarter.
Your turnover is £120k per quarter your prices for services will incur the 20%.
These figures are given to the Government each quarter through the Government Gateway portal, it used to be manual on a form but they done away with this.
As a rule of thumb if you buy more than you sell you receive a refund from the HMRC of the difference.
However if you sell more than you buy you have to pay them the difference.

This is why to volunteer to pay VAT you have to be very careful, as if you sell 20k worth of services and you buy 5k of products you will have to pay the difference to the HMRC - so not good.

There are also different levels of VAT accounting that you can do but these are in depth and it is something along the lines of every purchase must be over 2.5k and then you pay 14% (I think) but don't get bogged down with this too much....the same if you are selling overseas the EC sales lists come into play.

Right Im sort of with you. So for those of us who are not VAT registered, we still have to mark up our prices accordingly in order to make back the VAT.We have paid to buy our goods? So 20% more to account for VAT?
But the larger businesses that are VAT. Registered can claim a refund back if they haven't sold as much as they've bought?! My boss defo mentioned not paying VAT. If it's business to business transactions hence always needing a VAT receipt?

 

[Lynne Baker]

If you're not VAT registered you can't charge VAT, or claim it back.

 

[TPB]

Oh forgot to add, additives? That was my grey area? Could anyone suggest a price for me so i can work into my shellac.

 

[hazeleyes]

Yea i understand that. I doubt id be anywhere near that I struggle making 5k a year from a part time job :/.. But glad i listened.

Yeah, me too lol for now- I mean one day who knows where we will be??? ... It's good to know these things to understand how business really worms!!