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The Magic Cafe Forum Index » » Latest and Greatest? » » The Great UK Magic Dealers RIP OFF ! (12 Likes) Printer Friendly Version

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The Duster
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HMRC rules for the scheme

Overview


The amount of VAT a business pays or claims back from HM Revenue and Customs (HMRC) is usually the difference between the VAT charged by the business to customers and the VAT the business pays on their own purchases.

With the Flat Rate Scheme:

you pay a fixed rate of VAT to HMRC
you keep the difference between what you charge your customers and pay to HMRC
you can’t reclaim the VAT on your purchases - except for certain capital assets over £2,000

To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC.
The Duster
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The old stuff I read seemed to suggest that they couldn't join the scheme - the above info suggests they can

Leaving books out of this...

What I find interesting is that VanishingInc comes out well from this

Surely they should be charging customers 20% VAT and keeping the difference [?] but they are 'strangely' being honest and listing the actual amount of VAT they are paying [they should be allowed to 'keep the difference']

So they seem to come out of this well

Except the agreement seems to either be confused - I mean do they have to charge for books under the scheme [?] if not then those shouldn't have VAT listed...

But I would have thought they should list 20% VAT to the customers - and they [under the flat rate scheme] can keep the rest
Saturn UK
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Quote:
On Apr 17, 2018, The Duster wrote:
Vanish Inc are saying that they don't buy very much stock [which can't be true]

And so rather than pay the correct 20% VAT on all qualifying sales

They are paying a flat rate VAT of 7.5% on ALL sales

That is books, dvds, everything

So for most their stock you are paying less VAT than you should, but on books you are paying extra

I'm pretty sure they are not doing this correctly as they MUST be buying stock in - this is for businesses that don't have much VAT off set


Wow if that is correct it looks like they have made a big mistake.

They must be paying flat rate VAT themselves but they should still charge 20% or whatever the correct rate is to your customer.
Mark Traversoni

www.saturnmagic.co.uk

#theshopwithstock Pleased to be different!

FACEBOOK: www.facebook.com/saturnmagic.co.uk
The Duster
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Though....

how on earth do they pay 20% on everything they buy...

but only claim back 7.5% when they sell it on.

unless their USA branch buys the stock on American accounts... and they sell in on UK accounts [?]

I'm sure they are doing everything legal - even if they are using a loop hole or two

And the sheer fact they are only listing the 7.5% VAT seems to suggest they are not being sneaky about anything
Saturn UK
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If you pay flat rate you can not claim any vat on normal purchases, there are a few exceptions for capital purchases.

You must charge the correct rate for the product to your customer but instead of paying HMRC 20% you pay your flat rate 7.5% for example and you keep the balance which you hope covers the vat you paid on your purchases.

We do not pay flat rate, we pay vat on purchases, input vat and charge customers the correct rate vat, export vat.

We then pay the tax man the difference between the two.
Mark Traversoni

www.saturnmagic.co.uk

#theshopwithstock Pleased to be different!

FACEBOOK: www.facebook.com/saturnmagic.co.uk
JackMagic
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Quote:
On Apr 17, 2018, The Duster wrote:
This is their No Box price

Total: £49.75
(includes £3.73 VAT)

But all their prices come up with 7.5% VAT


This does still not work out as

Dealing With It Season 1

Vanishing inc £20.75
Alakazam £21.00
Big Blind £20.99
Saturn £19.03

So if everyone is charging 20% VAT

But Vanishing only 7.5% then they should be the lowest price but they are almost the same as everyone else

Except Saturn
The Duster
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First off to be clear...

VanishInc should be charging 20% VAT

But they pay HMRC 7.5% and are allowed to keep the rest

So they should be the same price as other places

They are mistakenly only listing VAT as 7.5% [but that's the amount they pass on]

So for dealing with it:

Dealing With It Season 1 £20.75

Total: £23.75
(includes £1.56 VAT)

You hadn't added on their VAT

But they can charge more for items than other shops if they wish to - that has nothing to do with VAT and has no importance in the discussion in this thread

I just think they are charging the VAT wrong - they should be doing 20% but only passing 7.5% on

BUT I can't believe they are running like that - as surely they must buy all their stock in [with 20% VAT] so it must be a night mare loss for them to pay Flat Vat Rate... unless they have found some way to mitigate VAT on the items that they buy in [?]
Martin.Lester
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I just checked what Jackmagic said and the price quoted Does include VAT on all items

£20.75 includes VAT £1.56 ( Dealing with it )

As for the Johnny Thompson book I was thinking of buying as the Free Poster offer so I did notice that VAT was included

which makes them £44 higher than Alakazam who is not charging VAT
The Duster
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Martin it depends....

There are two options

Dealing with it DL

Total: £20.75
(includes £1.56 VAT)

Or dealing with it DVD

Total: £23.75
(includes £1.56 VAT)

The bit that head fudges me - is they are both listed as:

£20.75 on the website

It's only when you put one in the basket that you see whether that price was including VAT or if they are adding VAT on top

AND how on earth is the VAT £1.56 if already added

BUT then also £1.56 extra if not already added

[as the price is different - pre VAT... so the amount of VAT should be different]

It makes Nooooooooooooooooooo sense
King14
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The price of Magic is through the roof in the UK VAT or no VAT. £40 for a deck of cards for a single trick. It has become a very luxury hobby.
KazMagic
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Phew! Lucky the only UK dealer I bought from is Alakazam. But I have always been wondering why the VAT is only 7.5%. Im not sure if they are doing something illegal, but this should be stopped.
The Duster
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Looks like they must have read my posts [in regards to the flat tax rules]...

They have also changed [as far as I can see] - all books say zero VAT

All other items say 20% [which they are allowed to charge, and pass on 7.5% to HMRC]

I'm not sure the prices ever changed for the customer - it just how it was broken down / looked on the screen/bill
drjohn
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Interesting read...... I buy from six dealers Saturn, world magic, propdog, alakazam, merchant and vanishing inc.... I always found it interesting that prices tend to be incredibly
Similar when it cones to props but when it comes to books the prices vary wildly I've seen books sold for £41 on one site then £48 on others ..... I've even seen books published by vanishing inc cheaper on other people's sites?? There's obviously something not right?
May your darkness come quickly
JackMagic
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Quote:
On Apr 20, 2018, drjohn wrote:
Interesting read...... I buy from six dealers Saturn, world magic, propdog, alakazam, merchant and vanishing inc.... I always found it interesting that prices tend to be incredibly
Similar when it cones to props but when it comes to books the prices vary wildly I've seen books sold for £41 on one site then £48 on others ..... I've even seen books published by vanishing inc cheaper on other people's sites?? There's obviously something not right?


You are correct about Vanashing Inc they are the most expensive dealer for books as they used to always charge extra Tax

even though they now have changed to say the don't Books take a look at Magic of The Magic of Johnny Thompson

Alakazam £215.00
Vanashinhg Inc £245.00

£30.00 More and same price they charged when it included VAT so all they have done now is to increase the Book Prices by 20%
JackMagic
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Quote:
On Apr 20, 2018, drjohn wrote:
Interesting read...... I buy from six dealers Saturn, world magic, propdog, alakazam, merchant and vanishing inc.... I always found it interesting that prices tend to be incredibly


This is due to Murphys who set a min Sell price as a few months back Prop Dog said they had the largest stock of any UK dealer and was the only dealer that would have plenty of availability

I asked if that was the case how come they did not get a beeter discount as normally the more you purchase the better deal you get they advise that the item had a min price they could sell it for set by Murphy's this is why almost all dealers charge the same price for everything as the price is set by Murphys
Colin (C.J.)
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Murphy's Law!
MazingMandy
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If I didn't know better I'd have thought The Jerx was having another competition for Most Boring Thread On The Café.
The Duster
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Quote:
On Apr 20, 2018, MazingMandy wrote:
If I didn't know better I'd have thought The Jerx was having another competition for Most Boring Thread On The Café.


Where is it?

As this thread is many times more interesting than the vast majority of L&G ones
Colin (C.J.)
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Only boring people get bored. Smile
Poof-Daddy
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I find the thread both interesting and informative although the "Latest & Greatest" is not the ideal place for it (just considering this is not a product).

Quote:
On Apr 20, 2018, drjohn wrote:
I've even seen books published by vanishing inc cheaper on other people's sites?? There's obviously something not right?


There is nothing wrong with that. It is a very common business practice. If I go to buy a car, the "suggested manufacturer price" is always higher than what a dealer would sell it for. Thus giving you the impression that I saved hundreds or even thousands. In the US, you see this on many products. A manufacturer will list a higher price and stick by that price if you buy direct where you can get it much cheaper from a dealer who buys in bulk from them.

Another thing that has always amazed me is when someone from another country has an issue having cards signed, ripping up cards, folding them in quarters... because they say it is too expensive. I can go into my local Walmart's toy department and buy Standard Bikes in red and blue for $1 (+ 7 cents sales tax). I can buy standards by the brick at Sam's Club for $15. I really feel sorry that something that "cheap" over here costs an arm and a leg in other places. I rarely use bikes though. I typically use Phoenix Brand and only pay $40 a brick ($3.33 a deck). They sell for $40 Euros a deck from Germany on that side of the pond but I don't know what the taxes are or if $3.33 Euros a deck is high. As far as mine go, they are priced fine. I just add $10 "as a part" of my total price when I do a gig because I might go thru 2 - 3 decks before the night is over.
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