Non vat registered - selling on Amazon France

Question posted by Jane Woodman, on behalf of Truly Unique in BA2

We have just started up a UK ltd company and are making c£3k per month eCommerce (Amazon) sales to UK customers. We'd like to start offering to Europeam customers too via Amazon but getting conflicting advice about whether as a non VAT registered business we can do so. From hmrc guidance we thought that until our total sales (from customers wherever) reached £77k pa we didn't need to register for VAT. However an Amazon affiliated VAT service company is insisting that any French customer sales would be Distance Sales and must have UK VAT applied. This seems like nonsense to me but looking for corroboration please!!

Posted:
Report inappropriate content

Richard England, on behalf of Consulting for Export in WD3.

Jane,
To have the confidence that your business is being fully compliant with VAT rules and regulations I suggest you contact Terry Dockley who is an expert on the subject. You might have to pay for his advice as this is what he does professionally, but you will get a definitive answer. His email is thd@terrydockley.co.uk and telephone number is T: 01635 576 298

Regards,

Richard England

Posted:
Report inappropriate content

Jonathan Harrison, on behalf of Baroni Limited in CR2.

Or speak to HMRC directly....
http://search2.hmrc.gov.uk/kb5/hmrc/contactus/home.page
under "Corporate and Business"

Also, you should employ a good accountant. It is preventing these sorts of issues and questions that they are worth their weight in gold - if you can find a good one.

I can see you will have a little problem. If you trade with France, you'll probably double your TO, it is reasonable to assume and get close if not exceed the VAT threshold anyway, and having to charge VAT will mean increasing prices by 20%!!!! That would kill you business if you can't find a way of reducing your costs. Obviously you can get the VAT back on purchases, but you'll still be adding something. Good luck.

Hope it helps

Posted:
Report inappropriate content

Damian Scattergood, on behalf of STAR Translation Services in Ireland.

Probably the better question for you is, do you expect to hit the VAT registration threshold. It might just be easier to register for VAT now. Otherwise you have a now and then situation, which you'll have to keep an eye on and update your records with Amazon again.

Whilst its a pain right now, it might be worth doing in the long term. VAT cross borders can be tricky. EU rules are getting tighter. I know we now record the VAT numbers of every cross border company/client we deal with. We have to produce VAT reporting for revenue here in Ireland and if you don't have a VAT number it raises questions. Having a VAT number certainly improves your EU credibility.

I'd agree with the other posters get HMRC advice on board.
Cheers
D

Posted:
Report inappropriate content

Jane Woodman, on behalf of Truly Unique in BA2.

I've done as Jonathan suggested and got in touch with Terry Dockley, who very kindly called me straight back and confirmed my understanding was fine i.e. no need to register unless or until either UK £77k registration limit or any EU country distance selling threshold breached. Until then the point of supply will be UK even on goods sent to final consumers in another EU country. Big thanks to Terry - he's extremely knowledgeable and reassuring, reading straight from and interpreting the relevant parts of VAT directive that is impenetrable to the layman!

Jane.

Posted:
Report inappropriate content

Richard England, on behalf of Consulting for Export in WD3.

Jane,
I think you will find it was me who provided Terry's details not Jonathan! Anyway, the result is what counts and I am glad you have spoken to someone who knows how to interpret the complexities of the EU VAT directives.

Regards,
Richard England

Posted:
Report inappropriate content

Jane Woodman, on behalf of Truly Unique in BA2.

Richard - apologies for the mix-up, & many thanks for sharing your contacts! J.

Posted:
Report inappropriate content

Anne Lester, on behalf of EUCCUK in WS9.

HMRC Videos

VAT inside the EU

http://www.youtube.com/watch?v=RKvongwAJYE&list=UUX03s8aGilPqvp992meZd6w

VAT outside the EU

http://www.youtube.com/watch?v=zxYyvO2pT5Q&feature=share&list=UUX03s8aGilPqvp992meZd6w

Best wishes

Anne Lester
EUCCUK
Credit Control and Customer Relations Service

Posted:
Report inappropriate content

Alan Goodliffe, on behalf of UK Trade & Investment Sweden in Sweden.

Dear Jane,

I recently dealt with a UK company that had made a considerable amount of sales to Swedish consumers via its webshop, but was unaware of EU distance selling rules. Having made sales beyond the distance sales threshold for Sweden, the company then got a hefty bill from the Swedish Tax Agency.

My advice is to be prudent. The turnover threshold for France is €100,000, beyond which you would pay VAT in France instead of the UK. If your business does take off and you approach this amount of turnover, then I would suggest you get in touch with the French tax authority to ensure that you don't get a shock later on.

Regards,
Alan Goodliffe
UK Trade & Investment, Sweden

Posted:
Report inappropriate content

Anne Lester, on behalf of EUCCUK in WS9.

Dear Knowledgeable People

I wasn't aware of such limits, myself and had thought I had this matter straight in my mind now.

HMRC advise that my clients pay no V.A.T. if they have no office based in the UK.

I am now wondering if a £s limit applies for my business also. i.e. If I collect monies due from my (overseas) client's UK customers, on behalf of my (overseas) client, and the amounts total over a certain amount, do I need to charge my client V.A.T. (even though they have no office based in the UK)?

China is a location of specific interest.

Many thanks for any further advice in this V.A.T. minefield.

Anne Lester
EUCCUK
Credit Control & Customer Relations Service

Posted:
Report inappropriate content

Alan Goodliffe, on behalf of UK Trade & Investment Sweden in Sweden.

Dear Anne,

there are different VAT rules if you are selling to consumers (B2C) or other businesses (B2B) and it depends on whether you are selling to other EU member states or to countries outside the EU. By and large, B2B sales to firms located in another EU member state will be zero-rated for VAT.

The thresholds that I mentioned above are only relevant for B2C sales.

I'm afraid that I cannot tell you anything about China.

Regards,
Alan Goodliffe, UKTI Sweden

Posted:
Report inappropriate content

To respond to this question, please Login or Register