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AtW
20th December 2003, 20:22
I plan on buying a few things for my future company from ebay - stuff like Software for them firm, perhaps some bits of hardware. Are there any implications regarding documentary evidence that would allow to offset costs using company funds? When I usually buy from ebay I pay using paypal from my personal credit card, would I have to change procedure to accomodate legal requirements???

fiddleabout
20th December 2003, 22:09
You may not get a VAT receipts so if you're VAT registered take that into account. I've put a few odds and sods through without any query from the accounant but iirc I did get proper VAT receipts.

From observation a lot of PC related stuff costs more on eBay than from an online trader such as eBuyer (Dabs were cr@p on pricing on all the items I've bought recently).

Use sites such as KelKoo and PriceRunner to compare prices - they sometimes throw up a surprising source as cheapest.

AtW
20th December 2003, 22:27
if I dont get VAT receipt then what is the implication? Ie, will I have to pay any money to Inland Revenue as the result?


I planned on becoming VAT registered immediately but might delay that as I won't be buying much so I see no much benefit from being VAT registered (claim it back). My knowledge of VAT processes is not complete so fee free to correct me. Hmmm, if I am not VAT registered does it mean that software that I sell won't have VAT - would that make me more or less competitive considering I plan to sell to businesses?

fiddleabout
20th December 2003, 23:40
The usual reason for getting no VAT receipt would be that the vendor was either not VAT registered or was on the fiddle - ie price is same as normal + VAT sale but he pockets all the money instead of passing some to C&E.

VAT has nothing to do with Inland Revenue.
How VAT works if you are registered ...

You buy item for £117.50 from a VAT registered source.
The price is £100 + £17.50 VAT - you reclaim the £17.50
You sell it for £235 -
That is £200 + £35 VAT

If these were the only transactions in a quarter your output vat would be £35 and your input vat £17.50 so you send a cheque for £17.50 to C&E


When selling to the public it is an advantage to be non-VAT registered as they cannot reclaim the VAT element of the price - selling to most businesses it is completely neutral as they will be able to reclaim the vat - except you may appear more credible if registered - if you are not VAT registered you are either on the fiddle or have a low turnover - threshold is around £55k - check the customs and excise website for the correct figure.

Only consequence of not getting a VAT receipt is that you can't reclaim the VAT even if you are VAT registered which obviously makes any given item a bit more expensive than if you can reclaim it.

They will not necessarily allow you to register on turnover below the trhreshold.

AtW
20th December 2003, 23:59
so the only downside of being VAT registered and buying from Ebay without VAT receipt would just mean that business paid exactly what it cost, ie not able to get some money back by reducing VAT on it?

What about other implications like how do I prove that I actually bought the item, ie to put it on cost of business or whatever depriciation is?

> They will not necessarily allow you to register on turnover
> below the trhreshold.

I thought that was trivial matter handled automatically by many accountants - ie it would not be problem to get registered when company as created.

cheers fiddle

Vetran
21st December 2003, 01:02
AIUI they like to see some turnover first, friends of mine have had real difficulty getting registered as a newish company despite the dormant company they had taken over had a superb credit rating.

Mine took ~ 3 weeks start to finish and they apologised for it taking so long but then I was rather close to the threshold. As to goods you can reclaim for quite some time after registering (I think goods bought 1 -2 years before registration can be reclaimed) phone the VAT man they are very helpful.

AtW
21st December 2003, 01:13
so to sum up, since I plan to sell my software to businesses and I do not expect to pay for anything apart from software + accounting + hosting I am not really going to lose out much by not being VAT registered?

1-2 years reclaim sounds fine by me.

what about explaining accountant that stuff was bought from ebay - it could be from privatep person so there will be no receipt, how to properly take it into account??

cheers Vetran

fiddleabout
21st December 2003, 13:11
I've used PayPal receipts in the past for private purchase items.

Like I said first off - eBay is not always cheapest. If things go wrong there are usually no enforcable warranties.

I didn't register for VAT til I'd been running about 6-7months and had to - as Vetran mentioned you can claim retrospectively.

AtW
21st December 2003, 14:45
yeah I know Ebay is not the cheapest for hardware at all - but show me place where I can buy Visual Studio 2002 or 2003 Architect that retails for £1800 for less than £300 (avg Ebay price)???

Since I pay by credit card I have some leverage, plus I only buy from reputable people with lots of feedback. Anyway thanks for opinions guys!

ASB
22nd December 2003, 14:43
Yep, £300 is about the price on Ebay. Only question is (generally) who is breaking copyright. You or the vendor.

AtW
22nd December 2003, 20:40
if the box is unopened and unregistered then its fine - selling version that was already registered _may_not_be_ but in reality it is unlikely to be challenged and to be honest that (and many other) bit(s) of EULA violate basic laws of being able to resell item that you bought legitimately.

fiddleabout
22nd December 2003, 20:52
If you are looking at hookey software (which from the discount you quoted I think you must be) why not go the whole hog and just get it from p2p

Far East specialises in copying anything and everything from Cartier watches to apparently genuine software.

I can probably get you more or less anything on CDR for £200 :)

AtW
24th December 2003, 19:05
you dont need to teach me fiddle ;)
i need legit soft for my firm tho - small price of £300 is acceptable.