Selling digital downloads B2B - to UK, EU or other countries -VAT, EU sales list, VAT MOSS questions

Discussion in 'First Steps To Starting A Business' started by Elizabeth Cadd, Feb 11, 2019.

  1. Elizabeth Cadd

    Elizabeth Cadd UKBF Newcomer Free Member

    6 0
    Hi all,
    I'm stuck - I can't start selling until I've worked out what to do regarding charging or recording VAT on sales.. I am not VAT registered yet as I would be well below any threshold usually.. but I think I may need voluntary VAT registration. Guidance would be really appreciated, I've spoken to HMRC, an accountant and other business people, read various HMRC stuff, but still not entirely clear about the way to go.. I hope someone can help. I'm creating a flow diagram to understand this - so please correct me if it's wrong:

    I'm selling high price digital downloads in most cases it'll be B2B sales. - Lets estimate I sell 30 downloads this year to start, Whoopee! I want to sell to UK, EU and other countries online. Here is my understanding:

    Scenario 1 - UK sale (B2B, Vat registered) - A VAT number is given - so VAT is not paid (reverse charged?) Does this just go in my VAT records?
    Scenario 2 - UK Sale (B2C, not VAT registered) - No VAT number given - charged VAT at 20%.
    Scenario 3 - EU Sale (B2B, Vat registered) - VAT number is given - so not charged VAT ( but proof of Place of Supply, tel, address or IP required for EU Sales List)
    Scenario 4 - EU Sale (B2C, no Vat number given) - so assume B2Customer > so charge VAT at their EU country rate. Use VAT MOSS to record/pay back VAT.
    Scenario 5 - Other Countries sale (B2B) > do I charge anything??? - Use Non Union VAT MOSS to record/pay back VAT.
    Scenario 6 - Other Countries sale (B2C) > do I charge anything??? - Use Non Union VAT MOSS to record/pay back VAT.

    Am I right in thinking I will have to go VAT registered for selling abroad generally? Hence, should I be charging VAT to UK or is there a special threshold for digital sales within the UK I can separate out?

    Anyone got a visual example of how to keep track of these different VAT type sales ?

    As you can see, what was a simple business idea, is now very complicated because of VAT, not to mention the B word.
    Your advice will be really helpful,
    Thanks, Elizabeth
     
    Posted: Feb 11, 2019 By: Elizabeth Cadd Member since: Feb 11, 2019
    #1
  2. ServWise

    ServWise UKBF Ace Full Member

    1,173 260
    You are not VAT registered so you can't charge VAT of any kind. If you are below the threshold you don't need to register. If you are VAT reged then VAT is only 0 rated IF selling to anther EU country and they have provided valid EU VAT number. To UK businesses there would still be VAT even if they gave you a VAT number. VAT to EU customers would be at UK rate, you only charge VAT at the buyers country rate if you are non EU selling into EU (could be a thing post Brexit). IANAL applies
     
    Posted: Feb 11, 2019 By: ServWise Member since: Jan 22, 2008
    #2
  3. Elizabeth Cadd

    Elizabeth Cadd UKBF Newcomer Free Member

    6 0
    MMm, not sure about that?
    I'm not VAT registered yet, but might have to be to SELL downloads to the EU??
     
    Posted: Feb 11, 2019 By: Elizabeth Cadd Member since: Feb 11, 2019
    #3
  4. ServWise

    ServWise UKBF Ace Full Member

    1,173 260
    Always good the be weary of free advice.. :)
     
    Posted: Feb 11, 2019 By: ServWise Member since: Jan 22, 2008
    #4
  5. Elizabeth Cadd

    Elizabeth Cadd UKBF Newcomer Free Member

    6 0
    Also what is IANAL? I'm interested in how I would procede if you are correct in the above comments?
    Thanks..
     
    Posted: Feb 11, 2019 By: Elizabeth Cadd Member since: Feb 11, 2019
    #5
  6. ServWise

    ServWise UKBF Ace Full Member

    1,173 260
    IANAL = I am not a Lawyer :)
     
    Posted: Feb 11, 2019 By: ServWise Member since: Jan 22, 2008
    #6