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Forum Moderators: buckworks
Well, we're in the 20% on the wrong side of the change, and so our shipping charges will have to increase. It's also going to be more hassle sending things out, because it's based on size and weight rather than just weight. Can't wait... :(
I really can't wait for it either.
Of course, the knock on effect is that I am going to have to increase my postage rates and this will then push me way over the VAT threshold meaning I'll have to raise it by 17.5% further.
Unless you are in competition with bricks and mortar. For exammple cheap books, CDs, posters the postage will be a much bigger issue for online shoppers. OK for amazon whose buisness model is free postage. Hurts the small online resellers.
Also if you are going to get pushed into the 58K VAT threshold then you can switch to the flat rate sheme and you can stay on this until 180K. This will save you lots of money. I pay 6% VAT, obviously I can't claim VAT back, but it works out to save me thousands. Also I have no VAT accounting bills.
If done properly I have worked out that I would have to pay about 10% VAT (deducting the things I can claim back from the things I have to pay), so if I could get a flat rate scheme below that, then I would be saving on it.
Actually after looking at the HMCE's 'VAT ready Reckoner' tool on their website, I should qualify for a 6% rate as well as I should come under the category of 'Retail not listed elsewhere'.
One very important thing to remember is that it is up to you to decide the best banding for your business, the VAT office take your word for it. You must be able to justify your choice if they audit you though, so don't take the mickey.