VAT Registered - Do I need to continue?

[Will Blears]

Hi there,

I am currently VAT registered, I opted to do this about one year ago. However, it's no longer beneficial for me to be VAT registered. However, I am not sure if I am now required to be VAT registered.

I make a significant portion of the companies income through Amazon in the US in total this is above the £85,000 current threshold. However, my question is - I do not sell a product or service, instead Amazon gives me a commission for referring users to their platform who then purchase something.

Since this is in the US and Amazon send me a cheque which is in US dollars, from Amazon US company and I then put this in my UK bank account. Would this be considered exempt from VAT or not?

Thanks!

 

[STDFR33]

It's neither. It's outside the scope of VAT.

If the majority of your sales are to the US, I am very surprised that you are worse off being VAT registered.

 

[Will Blears]

Thanks, well I originally signed up for VAT as I was on the FR scheme however now it is no longer beneficial since my current client deducts VAT from my total fee which means I lose out on 11% instead of gaining on 9%.

OK, so because it's in the US and because it's not sales then it is not even relevant - that's good to know, I kind of thought that...but wanted to clarify before I remove VAT from my company.

 

[lesvatadvice]

B2B supplies to a non-UK customer are usually outside the scope of UK VAT. So the FRS is best avoided. But those supplies are ignored when you determine your taxable turnover for mandatory registration.
But, you are allowed to reclaim input tax in relation to those services; so you could choose to remain registered.
But, do your arithmetic first.