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Sole trader vs. VAT registered - pros and cons?
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TOPIC: Sole trader vs. VAT registered - pros and cons?

Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13027

I am going to be importing goods from abroad and I will be selling them online to the UK, Ireland, US, Europe and further afield.

It seems to me that if I register my company I can claim back VAT, which is a good reason to register my company. How quickly can I get a VAT number?

Aside from less paperwork, is there any benefit to operating as a sole trader?

Would love your opinion on pros and cons.

Thank you!

Alicia

Re: Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13030

Registering for VAT is not directly linked to having a LTD
You can be a sole trader and register for VAT - most freelancers do

Re: Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13041

Yes you can register as a sole trader and for VAT at the same time on the same form.

Pros:
If you are VAT registered, you will not pay any VAT on goods imported from another VAT reg business in the EU
You will be able to reclaim the VAT on any purchases from other VAT reg businesses in Ireland

But:
You will have to charge VAT at the Irish rate on all goods sold from your website (if B2C not B2B sales) unless you also register for VAT in the country you are selling to, e.g. UK (in which case you can charge UK vat rate on sales to UK)

In Ireland and most other EU countries you must register for VAT if your turnover exceeds (or will exceed) a certain threshold, but you can also voluntarily register at any time.

There's a good VAT guide on www.revenue.ie

I'm no expert but am doing something similar to what you are proposing and that's my understanding of it all...

Hope it helps,

Alex

Re: Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13046

Last Edit: 2 years, 3 months ago by Fionan.

Re: Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13057

Last Edit: 2 years, 3 months ago by StuartMeharg. Reason: typo
The following user(s) said Thank You: jamesweb

Re: Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13058

alicp wrote:
...
Aside from less paperwork, is there any benefit to operating as a sole trader?
...


If you operate as a sole-trader you are personally liable for all debts of the business.

If you operate through a limited company you will have liability will be limited to your shares in the company. You're not personally liabily for the debts of the company unless you don't run the company in accordance with the law.

It's easier to set-up a sole-trade business; you don't have to wait for the company to be registered.

It's also easier to cease trading. A company should be liquidated and formally wound down.
Last Edit: 2 years, 3 months ago by StuartMeharg. Reason: typo
The following user(s) said Thank You: jamesweb

Re: Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13072

Thanks everybody, it's such a help!
Especially Stuart Meharg, your response was greatly appreciated!

Alicia
The following user(s) said Thank You: StuartMeharg

Re: Sole trader vs. VAT registered - pros and cons? 2 years, 3 months ago #13091

alicp wrote:
Thanks everybody, it's such a help!
Especially Stuart Meharg, your response was greatly appreciated!

Alicia


What a compliment - thank you. Glad to be of assitance.

Stuart.
The following user(s) said Thank You: Fionan
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