Yet another VAT post question

[imaginarynumber]

Hi all

I have looked through the other related threads- Honest!!!

I understand that if I am supplying a VAT rated product in the EU I need to add VAT to the postage.

What happens with order's outside the EU? I am not charging VAT on the products that I supply to them but does this mean that I do not charge VAT on the postage?

Additionally should the VAT be applicable based on the customer's address or the delivery address- by that mean that if Joe Bloggs orders in the UK but has it shipped directly to the US is the order exempt from VAT?

Thanks in advance

 

[spidersong]

Basically the VAT liability of the postage will normally follow the liability of the supply of the goods, for a normal mail/internet order business.

So if you are exporting items outwith the EU then the postage will be zero rated as well.

If you're selling goods then the VAT will depend on the delivery address, even if the customer lives next door to you, if they ask you to ship something to the US, the UEA, or Uzbekistan, and you keep proof of posting/shipping, then you can zero rate that sale as an export.

 

[imaginarynumber]

Hi Spidersong

Thanks for clarifying things- sorry about taking so long to thank you.

Now.... what happens if I am sending both VAT and VAT free items in the same package. I guess the whole postage is VATable.

 

[Wiggy]

If you're selling goods then the VAT will depend on the delivery address, even if the customer lives next door to you, if they ask you to ship something to the US, the UEA, or Uzbekistan, and you keep proof of posting/shipping, then you can zero rate that sale as an export.

This is different to my understanding. I understood that if the payment comes from an EU country it is also liable for VAT in much the same way as you will pay VAT if you walk into Argos to buy a pressie for a nephew in the US which you then send at the Post Office, there should be no tax advantage to making the same order by mail order.

Having said that, my understanding of this is from 6 or 7 years back and may be flawed. I am also not an expert being a mail-order seller not an accountant.
I will look it up and post what I find. . .

 

[Wiggy]

Had a look and have to withdraw previous post. Either I was barking mad or things have changed. I can find no specific mention of goods paid for in the EU but supplied outside it. . .So, it does make sense to get Argos or www.1stophair.com of course, to ship pressies to the US directly. . .

 

[mconridge]

Hi Spidersong

Thanks for clarifying things- sorry about taking so long to thank you.

Now.... what happens if I am sending both VAT and VAT free items in the same package. I guess the whole postage is VATable.

Yes, if any of the items dispatched are liable for VAT, then the whole postage amout is

 

[Wiggy]

Hi Spidersong

Thanks for clarifying things- sorry about taking so long to thank you.

Now.... what happens if I am sending both VAT and VAT free items in the same package. I guess the whole postage is VATable.

Just a thought. If you are a Royal Mail PPI account customer, splitting an order into two packages will cost you something like 26p plus the cost of the extra envelope/box. Should be simple to work out if it is worth packing zero-rated items with non zero-rated items. . .

 

[primrose]

I would contact HM Customs and Excise detailing what your products are and which countries you are selling to. They will confirm what you need to do regarding charging VAT.

 

[David Griffiths]

I would contact HM Customs and Excise detailing what your products are and which countries you are selling to. They will confirm what you need to do regarding charging VAT.

It's more likely that they will refer you to the published documents and tell you to read them and work it out for yourself.

In the rather unlikely event that they do tell you something, you will not be able to rely on it unless you have it in writing.

 

[UKSBD]

Slightly off topic, but if they do tell you somehing, do you then have the
right to receive a written ruling if you ask for one?

 

[primrose]

I wrote to HM Customs and Excise and they sent back a letter with a table detailing the areas I would be selling to and whether or not to charge VAT.

Hope this helps.