ebay dropshipping and uk vat

Systemagician said:

hi guys thanks in advance,

i have a small ebay/amazon dropshipping business that i want to take to the next level, am reluctant to do so as i will have to register for VAT in the uk. i could do with thoughts on couple questions if you can help pls.

i see sellers on ebay uk VAT registered and selling 10,000 items a month and more, they are uk based and are uk vat registered, my question is if they sell something for £20 vat inclusive there is £3.33 due to HMRC, the item they dropship may cost £17 on amazon vat inclusive of which you can claim £2.83 back in vat from there dropshipper. so theres 50p due to HMRC in vat. ( is this right )

how are these sellers keeping track of all this surely an accountant is really going to have his hands full with 10,000 sales invoices a month and 10k purchase invoices a month to go through?

1/ are they using a web based software ?

2/ would i need to print every single order and purchase invoice off for records

everything is done through paypal should it be quite easy?

i feel am missing something but before i really do smash this i want to make sure i can make it work, am also confused about vat on profit ?

thanks any help thoughts greatly appreciated

Click to expand...

Systemagician said:

also my biggest problem is if the seller is not vat registered and the orders fullfilled via amazon i am actually going to make a loss after paying the £3.33 vat ?
cant get my head around that one

thanks

Click to expand...