For sellers who intentionally stay under the VAT threshold, do you just use holiday mode?

[lens-sage]

For those sellers who don't think they could exceed the threshold by enough to make registering worthwile, by what means do you keep your sales under?

I'm guessing you use holiday/time away mode, but just wanted to know for sure.

[m25jet]

Although I no longer sell on eBay, having given up selling on eBay for good when they got rid of PayPal and introduced eBay Managed Payments, one thing did occur to me when I read your question.

If sellers had a lot of stuff to sell but wanted to keep their total sales at a level that would ensure that they did not exceed the VAT threshold, then I suppose it's possible that they could have more than one eBay account, with the second one registered in their other half's name so that it looks as though two separate people are trading on eBay, rather than one seller operating from two separate accounts.  I suspect a lot of unregistered business sellers are already doing this, although I do not have any solid proof to back up this theory, but given that eBay appear to turn a blind eye to so many unregistered business sellers who are clearly trading as private sellers it wouldn't surprise me at all if there are some unregistered business sellers out there who have already tried this trick as a workaround option to ensure that they do not get caught, either by eBay or the taxman.

[lens-sage]

I'm more interested in how legimate sellers limit their sales to stay under the limit rather than how some people might evade tax, but, whilst on the subject, with HMRC reporting now becomming automated, and tied to NI numbers, I can't imagine there would be much scope for such tactics moving forward.

[papso22]

The only way to legitimately stay under the VAT registration threshold is to make sure your sales are suppressed by stopping selling for a period.

'Going on holiday' would achieve that.

[lens-sage]

Thank you. That's as I thought.

I saw someone say about setting stock levels to 0, but that seemed more time consunimg and potentially more damaging to sales/ranking in the long run to me.

[dch2112011]

I would weigh up carefully the consequences of 'stopping selling' to avoid the VAT threshhold 

undoubtedly some people do this but it will have a detrimental affect on future sales - you lose momentum and to some extent have to start again with every pause in selling.

If your business is growing why would you want to restrict growth ?  you can balance input and output tax  which vastly reduces your VAT liability.

This simple reclaim will give you a financial cushion to grow - if you have been trading for more than a few weeks

You can generally reclaim VAT on goods you bought up to 4 years before you registered for VAT and services you bought up to 6 months before you registered as long as the following conditions are met; The goods were bought by you as the entity that is now registered for VAT.

You do need to work out what liability you are likely to have to pay but generally it is not as awful as you may think 

[lens-sage]

I'm thinking more specifically people who deal in used goods and often acquire from auctions or sellers who aren't vat registered such as boot sales, FB market, or even here on ebay. 

I imagine unless you are confident you can surpass the limit by a considerable margin, it could be somewhat disasterous.

I know one person who registered a few years ago to this day only sells just over the threshold and as they deal in used items, isn't in a postion to claim much back, so is singificantly worse off.

They did say something about trying to move to the fixed rate scheme or something similar, which is apparently better if you're unable to claim much back, but not sure if they did or not.

[wyattharrisx]

I turn off shop. Personally I know roughly how much in sales I can get in any given month as I have a rolling 12 month tracker that I update and usually around week 3 in every month I have to start to limit sales by turning off either part way into a day or a full day. It works well for me but you just have to be on top of where you are with sales

[dch2112011]

It is a personal call but ebay can demote listings on holiday mode or removed for a period of time - it may be worth limiting the live listings or increase prices to slow sales rather than becoming invisible 

The flat rate scheme kicks in at 150k turnover  see link

flat rate scheme 

[lens-sage]

Thank you that is very helpful. 

So you just use the away mode but keep a close eye on it in order to stay under but minise "losing out" too?

And you wouldn't say for your particular case you've noticed any negative consequences?

Thanks again for your insight.

[dch2112011]

Let's hope that the budget does not include a reduction in VAT threshholds - which given the murmerings from our esteemed leader may well be one of the loopholes used to raise revenue without increasing VAT !

[lens-sage]

The flat rate looks very interesting if you are unable to claim back on a lot of your purchases.

Under 150k to enter but can stay on th scheme till 230k.

That's very eye opening, actually.

If/when I approcah the limit, it would definitely be worth some consideration as 7.5% is a lot less than what I would have expected to pay under the traditional scheme but not having many purchaces I can claim back.

Having a 230k ceiling would also make margin less critical, so prices could be lowered plus lower margin items introduced, perhaps boosting overall sales further.

Very interesting that there are different options out there that can be a better fit for specific sellers.

[lens-sage]

Yes I have heard rumours as such, not sure what to think on that really. Would definitely be a sneaky way to do it whilst holding hands up and pleading innocence (we haven't put vat up!)

It would go down like a lead balloon for sure, though! Especially just months after it was increased.

I'm more inclined to think there will be another freeze for god knows how long. Some pundits think a token raise may happen, something barely significant, but we shall see.

Flat rate would definitely be worth looking into, if that happened!

[dch2112011]

The budget will be 'interesting' for want of a better word !

It's nice to see that you are doing well on ebay and that your dillemma is success based - a better problem than wondering where sales are coming from.

Good luck with growing your business VAT is just another element of success !

[lens-sage]

Yes interesting is defintiely one word. Although on some level, I have to appreciate them being realistic, at least comparatively. But it's definitely going to be interesting.

"It's nice to see that you are doing well on ebay and that your dillemma is success based - a better problem than wondering where sales are coming from."

To be honest I'm currently somewhere in the middle! Some months I think it might be something I'll have to think about one day, other months I chuckle to myself and how adorable it was that just a month ago, I was naive enough to think i'd ever get anywhere near having to consider it!

Still, keep plugging away, right? A positive mindset goes a long way.

And if I do ever have to worry about it (at least with the current threshold) at least I'll know I've come a long way.

[wyattharrisx]

No negatives no, other than I do likely lose sales when turned off but my sales usually pick up once I turn shop off holiday mode. Only other downside to consider really is when postage costs increase or wholesale costs so you have to put your prices up meaning it will take less items sold before getting close to the 90k threshold so there is that to consider. 

Just do what you just have to do what works for you

[just-got-personal]

The meagre sales on eBay no longer pose a threat to me going over the VAT threshold.

[wd.motors]

How did you get on with this?

I see your listings don't show a vat no so assume not entered into the flat rate vat scheme yet ?

Am much in the same boat having to turn off my listings every other few wks 

Nice to have the time off but also no way to grow ... and getting boring now