In short, I need some advice.
I have a client who:
Sells online on eBay/personal website
Has sales of £250,000+ for the year to date. 24% is merchant fees (which include vat) which are expenses (not deducted from the £250k)
90% of his purchasing is NON-EU (imports from China and assumed to pay no vat there). 10% is the UK based with most vatable except purchases made from Guernsey
100% sales are UK based
He sells used the decommissioned software. He has no duty paid to couriers/DHL as it's not a physical item, pays and receives his items digitally (email and credit card). Most likely assuming all purchases are zero rated.
He has a Ltd company registered and has a VAT number
What VAT schemes can the company take advantage of? Global accounting vat scheme? apportionment scheme (1 or 2)? some margin scheme(noting the sales are quite high)
I have asked some fellow accountants of mine and not everyone has used these schemes or has experience in using uncommon schemes.
The question is: is there a scheme that permits the resale of second-hand goods but high volume purchased from none-EU.
I have read up a little but still walk away confused as used software to a high volume is a niche business and Google doesn't help much.
At times the company is competing against rival sellers.
Let's say each item he sells is £100. Vat is 16.67. Selling fees are 24% of £100. That leaves his sale price at 100-16.67 - 24 = 59.33. Sometimes his cost for the same item will be £40 at times it can even be £70. if competing against another seller he doesn't always make 20% profit (after counting for the selling fees which are fixed).
Is there a scheme that doesn't penalize him for buying zero rated goods and reselling? if so which one?
If he continues selling at his current rate £3000-5000 per day in sales or £90-100k per month, whats the best scheme (if there is one) that he could potentially take advantage of?
I hope I have provided as much info as I can, I will look over the response and add info as required