| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 1:26:07 PM | | Yep we are paying twice, most 2nd hand car dealers pay VAT on the profit margin not the total selling price, as far as i am aware breaker yards could if they chose to operate the same scheme but because most transactions would be fairly small they charge VAT on the whole amount. | |
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| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 1:30:53 PM | Well it probably isn't the dealer / trader. The law is simple, if a company's turnover is above £67,000 per annum (only £1,288 per week) they have to register for VAT whether they like it or not. That means that they then have to charge you VAT on whatever you buy from them, unless it's a VAT exempt item of course but that's another minefield!
So is it the Government who is ripping us off? Oh REALLY....... as if they would!!
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cargy
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Joined: 10/13/2006
Msg: 5 | |
| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 1:33:08 PM | You seem to be working on the basis that tax is fair... it isn't!
For example, if you invested wisely in the stock exchange and made 40 grand profit, you would be taxed on it. However, if you then lost the profit because the shares taking a dive in the next tax period, you wouldn't get the tax paid returned, even though you have only broken even!
You also get taxed on tax.... Buy petrol and there's luxury tax that contributes to the "value" which is then used to assess it for VAT!
Let's not forget that you are taxed at source, as PAYE, before you can go and spend your hard-earned on the items that carry the luxury tax (with the VAT on top!)
IIRC, for every day you work 9-5, if you take ALL your taxation into account, you have to work till about 1.30pm before you are actually lining your pocket rather than filling HMRC's coffers! | |
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| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 1:34:59 PM | | Lifes hard, never mind.... Makes sense to me, if someone makes money from something they should be paying VAT on it... Maybe im being a thicko though... The benefactors of a 2nd hand sale arent necessarily the benefactors of the primary sale. | |
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| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 2:16:37 PM | Anyone registered for VAT can claim back the VAT they pay when they buy in goods or services, they then charge VAT on the goods and services they sell, the difference between what they claim and what they charge goes to the Government. If you are not registered for VAT you should not be charging it. Any VAT paid is paid by them; the final customer pays their costs plus their profit margin. They should not make a VAT charge at all. For some traders below the registration limit, it actually makes sense to register in order to gain the benefit of re-claiming.
Not everything is VATable. Food and books, for instance are VAT free (well, some are outside the scope and some are VATable but at zero rate).
Fiddling VAT is something that really gets my goat. Traders that fiddle it aren't ripping off the Govt. They are ripping off their customers and that pisses me off big time. | |
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| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 2:40:29 PM | I'm VAT registered and it's very true, the system is a minefield.
What makes it absolutely stupid to me is the fact that we have to charge VAT on all our invoices yet we sell to other VAT registered companies/individuals
We pay this vat, paid to us by these registered companies/individuals, to the vatman who then pays is straight back TO the company/individual......The only people this benefits are accountants/bankers as it keeps them in work but it costs the whole ecconomy Billions.
Added to this, it doesn't promote healthy competition or professionalism has our products have an instant 17.5% surcharge which means the unregistered 'cowboys' will always undercut us.
True, we can claim back the VAT on raw materials whereas the unregistered cowboys can't but these costs only amount to about 1/4 of the cost of a job.
The more I deal with HM Revenue & Customs the more inept they appear. They make totally stupid, even schoolboy errors in their accounting. So much so that they 'misplace' about £2million PER DAY yet if my accounts are wrong by even £1 I get fined £100 instantly.
The TAXMAN, don't ya just love him 
EDIT:
Fiddling VAT is something that really gets my goat. Traders that fiddle it aren't ripping off the Govt. They are ripping off their customers and that pisses me off big time.
Fiddling VAT is indeed ripping off the government at the benefit of traders AND customers.
A customer that pays in cash, who doesn't require a receipt gets the end product 17.5% cheaper.
For the cowboy trader, he doesn't have to put this money through his books which means the taxman loses out again because he charges 19% tax on the tradesmans profits......So the ONLY loser in these sorts of 'fiddles' is the government.
Can I just add here, if you are a tradesman who does 'fiddle' then just be aware, the IR WILL get you eventually and when they have you, they have you by the balls. They rattle them hard and never let go as a couples of my local competitors have found....Mwahahahahahah....cough! | |
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| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 3:07:35 PM | So the ONLY loser in these sorts of 'fiddles' is the government.
Have to disagree but it's probably more the way you worded it than anything. Those who in fact lose out are you, me, everyone as the Government then raises the required (lost) monies from us in another form of taxation.
I too am VAT registered, ridiculous really as I neither sell anything or provide a direct service yet have to account for 17.5% on everything, even if I sell a possession I owned before I was VAT registered through somewhere like ebay.
Additionally I can only claim certain items back against the VAT I have paid. For example I cannot claim the VAT on petrol because I don't need to drive my car to directly do what I do. But as I require a computer I can claim the VAT back on a purchase. The red tape is ridiculous but I cannot get out of it because I receive payments over £65k but that isn't the profit that I make.
The powers Customs and Excise can weild are also quite frightening. As an example they can force entry into my workplace (which is also my home) without a warrant if they so wish.
vvv thank you for that I shall sleep soundly in my bed tonight! | |
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| How many times can you be charged VAT for the same item?
Posted: 5/9/2008 3:17:02 PM |
As an example they can force entry into my workplace (which is also my home) without a warrant if they so wish.
There have been changes to the powers, as I understand it, since the merger with IR, I believe thet have been moderated a little. Not 100% sure about that though. Previously, they couldn't force entry but could require you to let them in without a warrant, they can also 'search' without a warrant but require your assistance (ie "what's in that drawer?" You open the drawer, the follow-the-finger technique). Course if you don't assist you could be arrested and then they don't need a warrant anyway. Those powers don't apply to any Tom, D!ck or Harriet in the Dept though. | |
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lignin
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Joined: 9/25/2007
Msg: 12 | |
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