VAT & exports.

[19ninety]

Alrighty, VAT questions from a novice - wasn't sure if this was best in the ecommerce or international forum?

As I mentioned in another post, my little side business is getting bigger and busier, a plus of the COVID pandemic! It's a Ltd company, but not VAT registered, its always flown a good way below the VAT reg threshold.
Most of the products I sell are imported by myself, some I buy from UK distributors, when I import products I have to pay VAT. Because I'm not VAT reg I don't reclaim that VAT (is that correct, if I was VAT registered I would be able to reclaim the VAT when doing VAT returns?), so on my website I don't display VAT on either the product pages, through checkout or on customer receipt/invocies. No VAT mentioned.
Even though I'm not VAT reg I still pay VAT on the goods I import, so I price my products in line with similar products sold by VAT reg companies, so I'm not charging "VAT" but am still recovering that expense.

I'm getting a growing number of sales in the EU and internationally too which is good. A customer has contacted me today after placing an order asking for a refund of the VAT as they will have to pay VAT when the product enters Switzerland, am I right in saying that I wouldn't have to refund anything as I'm not VAT registered?

 

[Mr D]

Sounds good.
Means when you do eventually grow enough to register you don't need to increase your pricing at all if you don't want to.
You are merely making more profit now.

Yes you tell them they haven't been charged VAT so nothing can be refunded.

Would be illegal for you to charge VAT unless you do register. At which point yes you can reclaim VAT spent on such things as importing (if on standard scheme not flat rate scheme).