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VAT & Internet Selling

  • Practice Licence
  • 30 posts
  • # 115831

Hi

I have a client who buys and sells over Amazon & Ebay. In the past year his business has grown and he has sold to France, Germany and Spain via Amazon.

His European sales are also purchased in france and delivery takes place there. The goods are not sent to him in the UK. 

Before the European sales, his turnover was approx £70,000 but his european turnover takes him to £96,000 and over the UK VAt registration threshold.

 

My query is 

1 Do the European sales count for UK threshold

2 He has no way of knowing if his european sales are to businesses or to individuals, so does he have to be EU registered? 

Any help on this situation will be great. 

PS did contact HMRC for clarity and still awaiting 

  • Associate
  • Practice Licence
  • 28 posts
  • # 115890

Hi Jennifer,

The following guidance will proably help you with your queries about sales to EU countries https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad. There are different rules for how you account for goods and services (acquisition tax and reverse charge) and also for B2B and B2C sales and whether services are digital or not. There are also VAT exceptions for some products groups.

Although if he is effectively running a warehouse in France, he may come under French VAT rules for those sales.

For registration rules this guidance should help https://www.gov.uk/vat-registration.

You may also like to point out to your client that HMRC is looking to crack down on non-registered VAT businesses (who should be) and Amazon and Ebay are coming under pressure to do more to check their marketplace sellers. See BBC news article http://www.bbc.co.uk/news/business-41658436.

I find this area of VAT very complicated, but I hope some of this helps.

Kathryn



Edited at 07 Nov 2017 09:21 AM GMT

  • Practice Licence
  • 30 posts
  • # 115894

KathrynH said:

Hi Jennifer,

The following guidance will proably help you with your queries about sales to EU countries https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad. There are different rules for how you account for goods and services (acquisition tax and reverse charge) and also for B2B and B2C sales and whether services are digital or not. There are also VAT exceptions for some products groups.

Although if he is effectively running a warehouse in France, he may come under French VAT rules for those sales.

For registration rules this guidance should help https://www.gov.uk/vat-registration.

You may also like to point out to your client that HMRC is looking to crack down on non-registered VAT businesses (who should be) and Amazon and Ebay are coming under pressure to do more to check their marketplace sellers. See BBC news article http://www.bbc.co.uk/news/business-41658436.

I find this area of VAT very complicated, but I hope some of this helps.

Kathryn



Edited at 07 Nov 2017 09:21 AM GMT

 Thank you so much Kathryn for your reply. We have spent some time and money getting proper advice and so that this information is clearly available for any future readers with the same problem, we have discovered:

buying and selling in another EU country, in this instance France the seller needs to be registered for vat in France. If you are importing goods and exporting back then that turnover meeds to be added onto uk turnover for uk vat purposes. 

my client has now been referred to a foreign tax consultant for further advice. In my opinion he will prob cease the french trading due to the headaches involved. 

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