I’ve recently became VAT registered. It’s a huge shock how much my profits have lowered! I can’t complain because it shows sales are strong and things are progressing… I guess it’s part of the game.
But at the same time it’s disheartening watching my potential profits get chewed up! My accountant has put me on the flat rate scheme which is 7.5%.
What did you guys do to combat these losses and still progress?
Any tips and advice now I’m VAT registered?
I’ve been doing 100% wholesale so far. Should I try and expand by getting a VA or doing some OA too?
When you register on the flat rate you don’t claim any vat back you only pay that 7.5%, the only vat you can claim is on the equipment you are buying for your business, from what I remember when running a restaurant , as most of the products we bought didn’t have any vat apart from drinks so the only way to do it was flat rate, because there wasn’t much to claim back.
Maybe someone else could explain it better.
Not sure if it works with fba if you are doing wholesale. You are paying a large amount VAT I don’t know how you would get round that.
Don’t go with flat rate mate you will be paying more as shipping cost amzone fees all have vat one it which you want to claim back and main part is the stock purchases
Your profits are being chewed up by being on the wrong VAT. Definitely speak to your accountant and ask for his reasoning for putting you on the flat rate?