Camera shop with no VAT

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Ferj

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I'm in the process of completing a grant application for some new gear but apparently the grant will not cover the vat of the purchase.

My advisor has suggested finding a dealer who won't charge vat.

Is this legal? If so does anyone know where? It's about £2k purchase so it would be handy :)
 
either VAT register (and claim it back) or go to a grey importer. You'll not find a UK retailer doesn't charge it
 
Thanks for the reply. I figured there wouldn't be anyone in the UK but wasn't certain!

How do grey imports work, I've heard about them but don't really understand! Are they legitimate & safe to purchase from?
 
I don't wish to derail your thread, but I have to ask ... how on earth does one get a grant for new gear, and from whom?
 
Ferj said:
Thanks for the reply. I figured there wouldn't be anyone in the UK but wasn't certain!

How do grey imports work, I've heard about them but don't really understand! Are they legitimate & safe to purchase from?
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Theres lots of info about buying grey here http://www.talkphotography.co.uk/th...rey-imports-and-other-assorted-topics.512133/
- Legitimate you make your mind up. Safe, well some suppliers certain are. Some aren't do some research.

As Sid sats I'd love to know how and who is giving this
 
how on earth does one get a grant for new gear
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Maybe for a photography business/Profession?. You can claim back VAT on various items. Gear, transport, fuel, even insurance for camera gear.
 
It's my local enterprise trust providing the grant, basically they will give me up to 50% back on what is spend (between £600 & £2000). I'm planning on purchasing a 6D & a lens.

I've had to go through some business courses & mentoring etc which personally I have found useful.
 
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Ferj said:
It's my local enterprise trust providing the grant, basically they will give me up to 50% back on what is spend (between £600 & £2000.
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Good grief! Never heard of such a thing, so thank you. Who's a lucky boy then ... :)
 
Ferj said:
It's potentially available for all businesses here's a link different areas provide grants in different ways, to new & established businesses. It's not about being lucky, it's about me looking into ways to do my business properly!

https://www.gov.uk/business-finance-support-finder
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I know I'm being daft, but I can't see any thing there would benefit a small one man photographer. point it out.

Lucky boy anyway
 
Jayst84 said:
Getting a grant of public funds whilst looking to avoid paying tax. Your advisor sounds great. (I know, you asked if it was legal or not, but still).
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I have to admit I was a bit bemused, apparently the grant doesn't cover vat so I guess he was trying to help!
 
Maybe it's a bit like the Princes Trust, I got a Grant for a business start up many many years ago, you had to be under twenty five, so it was a long time ago. I did a small business course and went on various seminars etc. I had a mentor and I got the grant for equipment that would be used in the running of the business.
 
jonbeeza said:
Maybe it's a bit like the Princes Trust, I got a Grant for a business start up many many years ago, you had to be under twenty five, so it was a long time ago. I did a small business course and went on various seminars etc. I had a mentor and I got the grant for equipment that would be used in the running of the business.
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Sounds very similar. It's been quite useful and there's ongoing support & courses too. I figured if the helps available it would be silly not too!
 
Ferj said:
I figured if the helps available it would be silly not too!
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Absolutely. My "lucky boy" was with respect to the fact that such help is available nowadays. If it had been when I started any of my businesses, I'd have snatched their hand off. The only help I ever got was a £30 overdraft facility when I opened an account with the Midland Bank in 1978 :D
 
Don't worry no one's offended me (it'll take more than that!).

Hopefully more small businesses will be able to look into it!

I just need to decide on the gear now for definite!
 
There is nothing illegal about a trader not charging VAT if they are not VAT registered (before the righteous bunch jump on the bandwagon).

However anybody with sales over £81,000 over a 12 month period has to register so you would probably be hard pressed to find a legitimate camera dealer in the UK that doesn't take well over the threshold in a year, given the price of cameras and other gear.

Grey importing would be the way to go. HDEW have a base in UK based and will provide a UK VAT invoice and still be cheaper.
 
Unless you buy a grey import of dubious legality, any element of the price you pay will be VAT.

If you buy from someone who hasn't registered for VAT yet, an element of the price they buy at will be VAT and its passed onto you in such a way that you can't claim it back.

The only way (I think) you'll get a receipt without a VAT element is on secondhand goods where the operator uses the margin scheme for VAT on secondhand goods - such as the secondhand lens I purchased from WEX recently.
 
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Ferj said:
Don't worry no one's offended me (it'll take more than that!).

Hopefully more small businesses will be able to look into it!

I just need to decide on the gear now for definite!
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If you setting up a business, register for VAT, and then you claim it back anyway.
 
Ozei said:
But then you'd have to charge vat to your customers - which is a disadvantage if you're turnover is less than the £81,000 p.a. vat threshold.
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Yes the extra 20% charged will probably make him un-competative in the business that he is in versus others in the same business

VAT can be a double edged sword and as said only applicable if your annual turnover is over £81k and only really sensible if your customers are VAT registered
 
I would speak to your accountant before even thinking about registering for VAT. It might benefit some business, but it definitely doesn't benefit others.

Whilst you can claim VAT back on purchases, you have to pay between 10-20% tax on all your income.
 
Serendipitous Sid said:
Absolutely. My "lucky boy" was with respect to the fact that such help is available nowadays. If it had been when I started any of my businesses, I'd have snatched their hand off. The only help I ever got was a £30 overdraft facility when I opened an account with the Midland Bank in 1978 :D
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If you were aged twenty five or under, you could apply to the Princes Trust for a new business start up grant. If successful you got £1000 up front off the Princes Trust, and a further £2000 odd off the Enterprise Allowance Scheme, when you signed off the Dole. The payment off the EAS was paid over a period of time, similar to getting the Dole. It was a safety net, while the new business took off, or not as the case may be.

This was back in 1987 when I applied, but I think the Princes Trust started about 1976.
 
Ozei said:
I'd be surprised if they gave a grant for camera equipment unless it helps in creating more jobs (i.e. taking on apprentices, etc). Have they given any grants to photography businesses already?
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When I got my Grant it was for items and articles to help me run the business, not for stock to be sold. So for example if the OP got the Grant, he could buy a Camera as the Camera is going to be used to take photos, as it's a Photography business. But you could not buy a Camera to be sold on as stock, mind you, you would not get many Cameras with the grant lol
 
Ferj said:
Thanks for that link. Pretty clear to me that buying grey imports is something I don't want to do :)
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Sound plan - leaving the morality aside you'd be pretty stupid to evade VAT and import tax on equipment where you are likely to have to submit receipts to HMRC as part of your first year of trading and/or to a grant body who will themselves have to submit the receipts as part of their own accounts

Leaving the grey import question aside the only other way of not paying VAT would be to buy from a uk dealer who has a turnover of less than 81k (unlikely) or to buy second hand goods privately (which the grant is unlikely to cover)

On the whole I'd say suck it up and just buy the goods from the best priced uk dealer you can find - take the grant for the ex vat cost, and claim the difference as a legitimate business expense against your pre tax income ( I wouldn't register for VAT unless you have to the ability to claim back a few hundred quid isn't worth the hassle at this stage). Okay so you'll need to cover the VAT element of the pricing up front - but that is far less than most business starts pay for equipment
 
Ozei said:
Was your grant used to buy a equipment for a photography business?
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No it was not it was a small catering venture, but the method and regs would probably be the same. You can use the money for equipment etc, but not for actual stock. Well that's what the terms and conditions were when I got my Grant and Enterprise Allowance Scheme money. I got about £3400 in total I think, not a bad sum back in the 80s
 
Princes trust grants are a lot harder to come by these days - they tend to focus on advice and training now
 
Were you to buy from a small non vat registered business, they can not charge vat on what they sell. Though it would have been incorporated in their own purchase.
When they sell on it is just that Price for the item, plus their margin.. with no vat charged or recoverable. But the price is the same as if vat had been charged.
non vat registered traders do exist, but as soon as they pass the threshold they must register.
 
Ferj,

As an accountant I know a bit about this area, although I am no longer based in the UK.

It is quite normal to apply for a grant for equipment (ie the fixed assets) to be used in a business, so in principal I see nothing wrong with you making an application for a grant for new camera equipment. By the way, grants are not just there to help you create new jobs, they are also there to help you create a job for yourself! So good luck with your application :).

It is also normal that business grants do not cover the VAT aspect of a purchase. This is logical since the majority of business who are VAT registered can claim the VAT back.

As was pointed about above, you should think carefully about becoming VAT registered. This may not be the right thing for you to do at this stage, so you should speak to your accountant about this and get professional advice based on your forecast financials and your personal situation. By the way, even if you are not currently VAT registered, you can claim VAT back at a later stage. You can in fact claim VAT back that was paid over the previous 4 years before you become VAT registered. This means that if you become VAT registered only in 4 years time, you can claim the VAT back on all relevant purchases over the previous 4 years! You must however keep proper accounting records and also evidence of VAT paid so keep your VAT invoices.

You mention that grey import businesses are not for you and that you want to do things properly with your new venture. This is good to hear, or read. It will serve you and your business better in the long term with an ethical mindset in business. Time has shown again and again that it is those who are honest in business tend to last longer in business than those who are not. Nobody should be comfortable doing business with a company or person who is bending or breaking the law in some way, such as fiddling their taxes, or selling dodgy goods and services. I am however a little concerned about your 'adviser' suggesting that you obtain your equipment from a dealer who does not charge VAT (unless they mean one who is not legitimately VAT registered). I hope they are not qualified accountants ! You might also want to think about guarantees, warranties and after sales service that you get when purchasing your new equipment from a legitimate photographic dealer. Don't forget, business is not just all about transactions, it is also about relationships, so forming a business relationship with a legitimate photographic dealer near where you are based could be of great benefit to you in many ways in the future.

I wish you well with your new photographic venture.
 
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Ozei said:
I'd be surprised if they gave a grant for camera equipment unless it helps in creating more jobs (i.e. taking on apprentices, etc). Have they given any grants to photography businesses already?
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I'm eligible for the grant, I've looked into it in detail!
 
Just to clarify, I don't think my advisor was at any point trying to get me to avoid tax, more look for a small independent place, but like some have said they will all be VAT registered so I'll have to suck it up and just be eligible for the amount after tax, but that's still a huge bonus!
 
Ferj said:
Just to clarify, I don't think my advisor was at any point trying to get me to avoid tax, more look for a small independent place, but like some have said they will all be VAT registered so I'll have to suck it up and just be eligible for the amount after tax, but that's still a huge bonus!
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The other thing is a non vat place based in the uk (if such exists) won't be charging the same price as a big dealer minus the vat anyway, because unlike a big player they won't be able to reclaim the vat on the stock they buy - plus they'll charge what the market will stand
 
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