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vAT for start-up entrepreneurs: VAT exemption for low turnover
I recently started my online shop (registration began in January 2023) and did not opt for the VAT exemption for low turnover at that time. Now I would like to do so, as turnover excl. VAT is/will be less than £25,000. How does this work in practice from now on? I have already been selling products via my website for a few months, with vAT included.
Question 1: My product costs 59 euro incl. VAT on the webshop – when I switch to VAT exemption for low turnover, the price will be 59 euro and there will be no VAT. So if someone wants an invoice, it will state 0% VAT. Correct?
Question 2: How does this work for my B2B customers from now on? They usually pay the purchase price multiplied by 2.5 (vAT included). How should I calculate this when I am not charging 21%?
Are there any other things I need to consider when switching to VAT exemption for low turnover?