What Part Do I Pay Taxes & Vat?

1. SimonC Says

   Firstly, what do you mean by “I just opened up a Limited company account, but haven’t set it up yet”? A limited company is one way of running a business. To create one you need to do it online of by sending forms to Companies House. There are lots of rules that need to be followed when running a limited company. But the basics of trading are no different to running your business as a sole trader. I am wondering if you mean you have opened a business bank account?
   Either way, the basics of what amounts you will be taxed on are the same. If your turnover is, or is expected to be, over £73,000 a year then you must register for VAT. Turnover means your total income, not your profit. £170 per day works out to about £62,000 per year, so if that is your turnover you no not need to register for VAT.
   When you are VAT registered you can reclaim any VAT paid out (eg VAT charged by suppliers) but you have to add VAT onto everything you sell. Essentially the difference between the two is what you have to pay to the government. Obviously because you are buying from individuals you will not be paying any VAT out to them, although there may be some VAT in other expenses you have to pay. So if you have to include VAT in your sales you will either make less profit or your prices will have to go up. Having said that, the VAT treatment of gold is not straightforward and certain supplies are exempt from VAT. I am not going to attempt to advise you on this – you need to speak to an expert.
   Despite contrary indications in some previous answers you can choose to register for VAT at any time if you wish. Generally, if you sell mainly to other businesses you will probably be better off by being registered. If you sell mainly to private individuals then you are better off not being registered, until you get so big you have no choice.
   Aside from VAT, you will pay tax on your trading profits. This is you total income, less allowable expenses such as cost of stock, rent, utilities, etc. If you are VAT registered all these will be the ex VAT figures. The tax you pay depends on whether you are trading as a sole trader (in which case you pay income tax) or a limited company (which pays corporation tax). There are other differences, and anything you take personally from a limited company may have further income tax to pay.
   Given the level of income you are talking about I would strongly advise you to speak to an accountant. Not necessarily use one regularly, but pay for some proper advice that is tailored to your exact circumstances.

2. Jim Says

   If you are based in the UK and turnover £170 a day, that would suggest that your turnover is approx £60k. You don’t have to register for VAT as you have not yet met the turnover threshold of £73k, but you might want to voluntarily register if it is advantageous for you to do so.
   Online gaming currency will be treated in a similar way to gift vouchers for VAT purposes. It’s a tricky area so you would need to get some proper advice really, either from HMRC or if you can afford it, a tax professional or accountant.

3. Petruscl Says

   You are not at the VAT line and I do not believe you have registered a Limited Company.
   You need to register for Self Assessment, write to HMRC (address from direct.gov.uk) and ask to be set up. They will set up your account and send you an info pack.
   Meanwhile have a record keeping system, business bank account.
   I am not convinced that this is real and not a puff for a trade site but hey-ho.

4. Jim Says

   You really need to be more specific.
   Is “makes me £170 ” your profit or your final sell on figure ?
   What is On Line game currency ?? Is it even vatable ? If what you buy is vatable then you should be charging VAT too.
   Is your limited coy account a bank account ??

5. Kernow Lady Says

   You need an Accountant. Do nothing about the Ltd company until you get advice.
   You only need to register for VAT if your turnover is 73k a year.
   You really do need advice as you seem clueless. (sorry)
   UK

6. General Knowledge Says

   Wow Blobby Blobby you must be very brave to open a Limited Company and not have any clue about taxation.
   Firstly VAT stands for Value Added Tax and you can only register for VAT if your turnover or sales figure is expected to increase to over £73,000. As you are not going to hit that figure on your current daily sales figure of £170, you can safely forget about VAT as you are not affected by it. That means you cannot charge VAT on your sales and neither can you claim back any VAT if you paid any, on your purchases.
   So then we come onto Company taxation. What you will have to do is to draw up a set of accounts for your limited company at the end of your year of trading and then pay corporation tax on any profits your company has made. You might need some help on this one but luckily for you, there are many, many desperately unemployed accountants here who will probably do it for you for peanuts. Just keep an eye on the replies you get to this question and you will be able to hand pick a desperate enough accountant to contact to get your accounts done cheaper than an overnight visit to Soho.
   If you are unwilling to pay an accountant to do your accounts for you (as most people are) then you can visit the Inland Revenue website where you will find lots of tips on how to register your company for taxation and what to do about your accounts and even how they will charge you tax on your profits:http://www.hmrc.gov.uk

Leave a Reply

You must be logged in to post a comment.