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Ordering from Thomann...

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Re: Ordering from Thomann...

Postby Sam Spoons » Tue Jan 26, 2021 8:56 pm

The theory is that basic necessities are either exempt or zero rated. It doesn't seem to be entirely well thought out as adult clothing attracts standard rate as does alcohol and hot food along with some silly anomalies such as biscuits and cakes (the former attract standard rate VAT the former don't). Domestic fuels receive a lower rate (5% at present) but road fuels attract VAT ant full standard rate and it is charged on the duty as well as the fuel, if anything is a scam that it it :madas:
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Re: Ordering from Thomann...

Postby N i g e l » Tue Jan 26, 2021 9:35 pm

Sam Spoons wrote:The theory is that basic necessities are either exempt or zero rated. It doesn't seem to be entirely well thought out as adult clothing attracts standard rate as does alcohol and hot food

oh! hot food, thats a sore point for me. I really noticed the jump when they put VAT on hot supermarket chicken :madas:

....as for biscuits & cakes, there was the great Jaffa cake VAT debate, biscuit or cake ?
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Re: Ordering from Thomann...

Postby MOF » Tue Jan 26, 2021 9:44 pm

oh! hot food, thats a sore point for me. I really noticed the jump when they put VAT on hot supermarket chicken :madas:

....as for biscuits & cakes, there was the great Jaffa cake VAT debate, biscuit or cake ?

The pastie tax was very quickly U-turned. :lol: I didn't realise that was the cause for the chicken price rise. I used to get one occasionally and then didn't for some time, when I saw the new price recently I gave it a miss, proves my point about VAT, a disincentive to purchase.

I thought the whole point of capitalism was to encourage consumption to therefore give close to full employment. If over consumption takes place, that is inflationary, and can be controlled by the money supply.
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Re: Ordering from Thomann...

Postby blinddrew » Tue Jan 26, 2021 10:56 pm

Yeah, the problem with capitalism is that it doesn't work any better than socialism when faced with reality.
;)
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Re: Ordering from Thomann...

Postby N i g e l » Tue Jan 26, 2021 11:24 pm

MOF wrote:...The pastie tax was very quickly U-turned. :lol:

Pastygateheadlines still funny today...

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Re: Ordering from Thomann...

Postby MOF » Tue Jan 26, 2021 11:40 pm

Yeah, the problem with capitalism is that it doesn't work any better than socialism when faced with reality.
;)

You might say that, I couldn't possibly comment. :lol:
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Re: Ordering from Thomann...

Postby JRC1 » Wed Jan 27, 2021 12:54 am

MOF wrote:
The pastie tax was very quickly U-turned. :lol:

I read that as Paiste tax and was wondering when cymbals started having their own tax.
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Re: Ordering from Thomann...

Postby Eddy Deegan » Wed Jan 27, 2021 1:11 am

Hugh Robjohns wrote:
MOF wrote:...the real problem comes when you’re selling to the public and you’re competing with non VAT registered traders who can afford to charge the same or slightly less than your VAT inclusive price and make <20% more money than you.

This is true, and it's why I object strongly to the ludicrously high VAT threshold of £85k in the UK. Our European colleagues mostly have a mandatory registration threshold of around €10k which is a far more sensible cut-off between back-bedroom hobby-businesses and genuine commercial enterprises.

Circumstances differ greatly and my particular circumstances mean that I'm very happy with the VAT threshold being high, at least for as long as it applies equally to goods and services alike.

As the British co-founder and shareholder of a Dutch company, and as the only British employee of that company, rather than incur the significant overheads associated with having an accountancy firm provide a mechanism for me to be paid under PAYE (which we did for a while but which includes a pension overhead which is extortionate in its admin costs, and which remains obligatory unless we go through some seriously high hoops to set up a legal international directorship which I'm really not interested in doing) my status with HMRC is that of a sole trader who invoices the company on a monthly basis.

If the VAT threshold was £10k then I would presumably (and I am assuming here so do correct me if I'm wrong) have to either take a 20% paycut or invoice my company for 20% extra per month in order to maintain the effective gross pay I currently have. Neither of these strike me as particularly fair or just in my case and as such having a decently high VAT threshold makes my circumstance viable.

HMRC are doing just fine out of it. I should know, I just chucked a very healthy wodge of dosh in their direction which I'd love to have given to me by someone else!
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Re: Ordering from Thomann...

Postby Sam Spoons » Wed Jan 27, 2021 11:11 am

MOF wrote:I thought the whole point of capitalism was to encourage consumption to therefore give close to full employment. If over consumption takes place, that is inflationary, and can be controlled by the money supply.

The whole point of capitalism is to make money for capitalists, i.e. the people who already have money :headbang:
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Re: Ordering from Thomann...

Postby Hugh Robjohns » Wed Jan 27, 2021 12:57 pm

Eddy Deegan wrote:If the VAT threshold was £10k then I would presumably (and I am assuming here so do correct me if I'm wrong) have to either take a 20% paycut or invoice my company for 20% extra per month in order to maintain the effective gross pay I currently have. Neither of these strike me as particularly fair or just in my case and as such having a decently high VAT threshold makes my circumstance viable.

You would charge the company 20% extra.... This is the way I work with SOS.

So you invoice the company, just as you do now, but add VAT on top. The company, being a VAT registered business, pays your invoice (fee plus VAT) and then claims that VAT element back when they file their own VAT returns. Similarly, you pass the collected VAT from your invoice on to HMRC when you file your VAT return.

So being VAT registered really makes no difference in a b-to-b transaction other than involving a modest bit of additional paperwork and accountancy, and watching the VAT portion of the money spin around in circles!

Of course, as a VAT registered trader, you can reclaim the VAT on everything you buy as a legitimate part of running your (local) business -- office stationery, computers, printer inks, broadband fees, mobile phone contract, etc etc... It all becomes 20% less expensive...
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Re: Ordering from Thomann...

Postby Eddy Deegan » Wed Jan 27, 2021 1:17 pm

Hugh Robjohns wrote:The company, being a VAT registered business, pays your invoice (fee plus VAT) and then claims that VAT element back when they file their own VAT returns. Similarly, you pass the collected VAT from your invoice on to HMRC when you file your VAT return.

So being VAT registered really makes no difference in a b-to-b transaction other than involving a modest bit of additional paperwork and accountancy, and watching the VAT portion of the money spin around in circles!

Ahh, that makes sense. We'd have to get the Dutch company registered for VAT in the UK though, but that's something we could certainly look into, and may well have to at some point for other reasons anyway.

I'll mention it to my accountant :thumbup:
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Re: Ordering from Thomann...

Postby Hugh Robjohns » Wed Jan 27, 2021 1:28 pm

Eddy Deegan wrote:Ahh, that makes sense. We'd have to get the Dutch company registered for VAT in the UK though...

Certainly something well worth discussing with your accountants, both here and there.

I'm not sure what the situation is now that the UK is not part of the EU... previously, VAT on sales between countries was handled relatively seemlessly.

It may well be that under the new arrangements, it would be easier to set up a UK arm of the business that trades with you and anything else in the UK, and has a UK VAT registration, so the circular money stays inside the UK...

But a good accountant will know.

Obviously I don't know your particular circumstances, but if you have significant business expenses, and your primary customer is VAT registered, then being VAT registered yourself can be a significant benefit. The extra paperwork and bookkeeping is entirely trivial (it takes me less than five minutes every quarter).

On the other hand, if the customers you invoice aren't VAT registered then you end up being 20% more expensive than your non-registered competitors -- which was the MOF's original complaint. And the pros/cons balance becomes less clear cut, depending on whether you have significant input expenses to create your product!
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Re: Ordering from Thomann...

Postby MOF » Wed Jan 27, 2021 2:40 pm

The whole point of capitalism is to make money for capitalists, i.e. the people who already have money :headbang:

The whole point of capitalism is to make more efficient use of resources, to create and consume those goods.
If the agricultural and industrial revolutions hadn’t happened, aided and abetted by trade/empire, then most of us wouldn’t be here, because it would still be the ‘strip system’ of agriculture, a marginal and unforgiving existence with inherent limits on population size. There would definitely be no SOS magazine or forum.
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Re: Ordering from Thomann...

Postby James Perrett » Wed Jan 27, 2021 3:04 pm

Hugh Robjohns wrote:Of course, as a VAT registered trader, you can reclaim the VAT on everything you buy as a legitimate part of running your (local) business -- office stationery, computers, printer inks, broadband fees, mobile phone contract, etc etc... It all becomes 20% less expensive...

And if you can find a way to incorporate your musical activities into the VAT registered business all your gear purchases suddenly become cheaper too ;)
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Re: Ordering from Thomann...

Postby Dynamic Mike » Thu Jan 28, 2021 2:40 am

JRC1 wrote:
MOF wrote:
The pastie tax was very quickly U-turned. :lol:

I read that as Paiste tax and was wondering when cymbals started having their own tax.

Whereas I thought it only applied to Burlesque artists.

I seem to recall VAT was originally sold to us as a 'luxury' tax which would only be applied to your second superyacht.
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