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Effectively companies don't pay VAT, they just collect it on behalf of HMRC
by youngtaff 7y ago
Effectively companies don't pay VAT, they just collect it on behalf of HMRC
- hartator 7y agoVAT is technically paid by companies. They will love to sell their products for 20% less.
- urbanjunkie 7y agowhich they literally do to any VAT registered company.
- Kurtz79 7y agoBut it is effectively paid by consumers... as you say companies already compensate for VAT in the price.
- benaadams 7y agoCompanies don't pay VAT on their purchases; the consumer pays the VAT. Would they sell their products for 20% less; or would they decide consumers were happy to pay at that price so keep the price the same and keep the extra as profits?
- youngtaff 7y agoVAT is not paid by companies! I run a VAT registered business… I discount all the VAT I pay my suppliers against the VAT I charge my customers, and send the balance to HMRC Every VAT registered company does the same - non VAT registered businesses and individuals pay VAT
- hartator 7y agoYou pay VAT between the difference VAT incomes and VAT expenses. Exactly like tax on profits. It’s just at another accounting level. The distinction is arbitrary.
- eptcyka 7y agoEffectively or not, I expected to see more tax being paid purely because they'd have to pay VAT. Regardless of who effectively pays, they still have to transfer about 20% of all revenue gathered from selling to consumers. So I was curious as to why these numbers didn't add up. I'm perfectly ok with someone telling me why I'm wrong as well, I'm no accountant.