Hi-Fi Collective and VAT

Somewhere to tell us of supplies who go the extra mile, or run away with your dosh.
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Greg
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#1 Hi-Fi Collective and VAT

Post by Greg »

I have just placed an order with Hi-Fi Collective to be sent by simple 1st class post. Nick has automatically charged me VAT on the postage. My understanding is basic Royal Mail postage of this order is exempt from tax. I'm I right or a bit out of date on this?

PS. I have no issues with Nick Lucas and Hi-Fi Collective. He provides an excellent efficient service supplying good quality components.
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pre65
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#2 Re: Hi-Fi Collective and VAT

Post by pre65 »

Have you raised this with Nick Lucas, Greg ?
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Greg
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#3 Re: Hi-Fi Collective and VAT

Post by Greg »

No, 'I've only just submitted my order. I will speak to him about it if necessary but want to be sure of my facts before doing so. I've looked at the Royal Mail and Government websites on this and as far as I can deduce, VAT should not be chargeable, however, their entries are not the easiest to understand. It doesn't help that Nick's invoice simply includes 'postage' and does not state 'postage and packing'. I suppose I would be liable to VAT on his labour to pack the items and possibly on the packaging used, but I believe the actual postage should be VAT exempt.

Any advice much appreciated.
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#4 Re: Hi-Fi Collective and VAT

Post by pre65 »

It would seem Nick is doing things correctly.

The purchase of unused postage stamps does not attract VAT – this is explained in Notice 701/8 postage stamps and philatelic supplies. However, if any delivery charge you make to your own customers includes the cost of stamps you buy from the Post Office you may have to charge VAT on the whole amount including the cost of those stamps.

https://www.gov.uk/government/publicati ... -marketing
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Greg
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#5 Re: Hi-Fi Collective and VAT

Post by Greg »

Yes, in principle I believe you are right albeit I was struck by the ambiguity of .....'you may have to charge VAT on the whole amount including the cost of stamps'.

So I looked at Notice701/8.

https://www.gov.uk/government/publicati ... c-supplies

It would seem VAT is only applicable to postage charges over £1. As my order is for four very small resistors, one could argue the postage will be below £1 and therefore not vatable, but that would be pedantic in the extreme and I'm never one to be like that :lol:
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#6 Re: Hi-Fi Collective and VAT

Post by Mike H »

According to this only stamps (purchase of) are VAT exempt.

http://www.royalmail.com/information-va ... l-services

Note also 'business post' is subject to VAT.

Since forever VAT had been added to postage of Danbury orders but then it is postage AND packing. Most often Dave has parcels collected from his works by another firm to be posted within the UK, ANC or somesuch? If Nick is doing the same sort of thing then as far as he's concerned that's where the VAT is being added.
 
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#7 Re: Hi-Fi Collective and VAT

Post by mainscablesrus »

So are we talking about 20p or thereabouts?

VAT on a first class stamp?

20% on £1

Please enlighten me on the actual costs involved dude?
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#8 Re: Hi-Fi Collective and VAT

Post by jack »

Like (probably) yourself, I have been VAT registered in the past - details matter :)

Its not the amount that matters really, but from a trader's standpoint, its whether its correct or not to charge VAT like this.

I had a couple of VAT inspections - for those that haven't had one, its not necessarily that you've done anything wrong, more that they want you to stay on your toes and be careful - every tiny detail of your VAT is audited... everyone who is VAT registered should be audited by HMRC every few years.

Stuff like not charging VAT where you should or charging VAT when you shouldn't, even on tiny amounts, really matters to them and they can (and do) fine you for getting it wrong - ignorance if the rules is not a defense. The devil is in the detail and HMRC (who deal with VAT) are famously short on humour...
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#9 Re: Hi-Fi Collective and VAT

Post by Paul Barker »

I hate the fact that I have to be vat registered.

When I was in a different job buying and selling camera film and paper in the grey market, which is fully legal, turning over 3 million pounds a year we were visited. They didn't like what we did but I was totally transparent and explained in every detail how we took advantage of the way companies like Kodak sell the same product into different world markets at rediculously different prices. The grey market is to buy for example in Mexico and sell in the UK.

It was at the same time as it was worth buying a LHD car in Belgium for half the UK price and having it converted to RHD and still save a fortune. I think it was Denmark where cars were half the price of UK.

They grey market probably still exists. But I am no longer in it. It was stressful.
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