VAT on Used Ladies Clothes

[magee1976]

Morning

 I have an eBay shop which has now reached the £90,000 VAT threshold and must register with HMRC. I’ve contacted three separate Accountants who have all told me conflicting evidence. I sell used ladies clothing … will I owe 20% off the turnover ie it’s no longer even worth me continuing? I’ve sorted on my own to go digital (Xero) and feel confident about it. Please can anyone tell me is it 20% from turnover or a combination of both? Or something else? Thank you!

[gjalp]

Have you checked the VAT pages on HMRC? I usually find their pages invaluable (as well as their youtube channel and webinars). I don’t know much about VAT other than you add VAT to your goods and then  report the amount you added and what you were charged by businesses every 3 months and the amount of VAT you pay is the difference between the 2 (assuming you have charged more than you have paid to other businesses). 

[papso22]

A VAT registered seller has to charge VAT on all goods they sell, new or second hand.

They charge it by adding it on at 20% which then becomes 1/6 of the gross sales receipts.

How they account for the VAT depends on whether they use a second hand margin scheme.

I cannot believe there are accountants that struggle with that!

[cbclassicbuyer]

Blimey, you must sell a lot of clothes. The turnover threshold for VAT registration is £90,000 per year.

Every accountant knows that.

You only pay VAT to HMRC if you've charged VAT, and you have to be VAT registered to do that.