VAT on online sales

Discussion in 'Accounts & Finance' started by BOND, Sep 21, 2010.

  1. BOND

    BOND UKBF Newcomer Free Member

    Posts: 27 Likes: 0
    I am planning to start an online business. I expect my turnover to be above £70000. So I would need to be registered for VAT. Lets say I will put a price of £20 inclusive of VAT. There would be some customers from outside EU as well. I understand I should not be charging VAT from them. So would that mean , I charge £17 +VAT=£20 from UK customers and pay VAT portion to the Revenue. However for outside EU customers I can charge £20 and wont pay any VAT on that. Please could anyone suggest if this is the right way of dealing with this.
    Posted: Sep 21, 2010 By: BOND Member since: Mar 9, 2009
    #1
  2. BOND

    BOND UKBF Newcomer Free Member

    Posts: 27 Likes: 0
    no answers???
    Posted: Sep 24, 2010 By: BOND Member since: Mar 9, 2009
    #2
  3. Joanne_UK

    Joanne_UK UKBF Newcomer Free Member

    Posts: 196 Likes: 19
    customers outside the EU should not be charged with the VAT so they should pay £17.02 , most e-commerce should be able to handle this.
    My international customers will see the item priced at , for example, £20.00 but at checkout (when they select their country) the price will adjusted not to include the VAT so they will pay £17.02.

    hope this helps
    Posted: Sep 24, 2010 By: Joanne_UK Member since: Jun 6, 2005
    #3
  4. tom1457

    tom1457 UKBF Newcomer Free Member

    Posts: 35 Likes: 2
    Not sure if what you are doing Jo is correct, hopefully an accountant will clarify this. My understanding regarding Vat is that is is not applicable if supplying good to other EC countries if they are Vat registered in there own country and have supplied you with a Vat registration number. Supplying customers over the internet would normally have Vat unless it is a Zero rated item. Jo you may find you will have to pay the Vat man for sales you have not collected Vat on?
    Last edited: Sep 25, 2010
    Posted: Sep 25, 2010 By: tom1457 Member since: Jan 21, 2010
    #4
  5. Scalloway

    Scalloway UKBF Legend Free Member

    Posts: 6,753 Likes: 1,639
    Posted: Sep 25, 2010 By: Scalloway Member since: Jun 6, 2010
    #5
  6. CSBob

    CSBob UKBF Newcomer Free Member

    Posts: 217 Likes: 61
    I believe (hope) that Jo is actually correct. Supplying to outside the EC should be zero-rated - whether the order is made via the internet or not (hence her £17.02 rather than £20).

    If this is not the case then she's by no means the only one reading this wrong.

    We could do with an expert's clarification!
    Posted: Sep 25, 2010 By: CSBob Member since: Sep 17, 2010
    #6
  7. Scalloway

    Scalloway UKBF Legend Free Member

    Posts: 6,753 Likes: 1,639
    According to the link I posted above you can only supply non UK customers in the EU VAT free if they supply a valid VAT number.
    Posted: Sep 25, 2010 By: Scalloway Member since: Jun 6, 2010
    #7
  8. tom1457

    tom1457 UKBF Newcomer Free Member

    Posts: 35 Likes: 2
    After checking further Jo is correct.

    Basically the rulls are.

    Within the EU
    If the customer is Vat registered you do not charge Vat
    If they are not registered Vat has to be charged.

    Outside of Europe
    VAT is a tax charged on goods used in the EU, so if goods are exported outside the EU, VAT isn't charged. You can zero-rate the sale, provided you get and keep evidence of the export, and comply with all other laws. You must also make sure the goods are exported, and you must get the evidence, within three months from the time of sale. This can be longer for goods that need processing before export and for thoroughbred racehorses.
    The time of sale is the earlier of:

    • the day you send the goods to your customer
    • the day you receive full payment for them (if earlier)
    You mustn't zero-rate sales if your customer asks for them to be delivered to a UK address. If the customer arranges to collect them from you - an indirect export - you may be able to zero-rate the sale as long as certain conditions are met.
    Last edited: Sep 25, 2010
    Posted: Sep 25, 2010 By: tom1457 Member since: Jan 21, 2010
    #8