VAT and Internet shops

VAT and Internet shops

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I am a new business owner, attempting to set up an Internet shop. I know it is unlikely that I will sell enough to register for VAT, but I am wondering at what point I should sell items and include tax?

Also confused about shipping abroad and whether to add on more than cost?

Do I just sell until I look likely to reach £73,000 target and then register?

Also, some items I sell are sale or return items and I am acting as agent on behalf of the makers. I take a commission on their sales.....what do I do here, in relation to charging VAT?

All answers appreciated.....

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By Democratus
02nd Feb 2012 12:54

Ellie - Good Luck with the enterprise

You do indeed seem to be a bit confused. You should speak to your friendly neighbourhood accountant for some basic advice. It would appear to be a good investment. Ask your friends for a recommendation, A good competent bookeeper would be able to help you also.

Why worry about VAT now if you are just starting and unlikely to generate sufficient sales to require compulsory registration? 

Regarding your shipments - you should charge at least cost,(presuming you mean cost of shipping). Or you may find a standard charge works better, (UK Mainland. Other UK, Europe RoW).

Your commission is your sale in the case of your agency sales. VAT, if applicable, would be on these sales. Again assuming your principal is in the UK. It may be different if they are abroad.

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By DMGbus
02nd Feb 2012 21:53

Distance Selling Regulations

You should study the Distance Selling Regulations.

Just searched HMRC website, and can you believe it:

" There are no results for "distance selling regulations"  "

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Therefore tried Google...and lots of results.

The regulations cover consumer law / rights plus tax law especially regarding VAT.

If you sell enough goods to another EC country you might be liable to register in that EC country.

Google search finds HMRC's information on DSR at:

http://www.hmrc.gov.uk/vat/managing/international/distance-selling.htm

This page refers to sellers from outside the UK selling into the UK, it is mirrorred by similar rules for sellers in the UK selling into other UK countries - the difference here is that different limits apply to different countries.

Here's an EC webpage referring this this matter:

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/distance_selling/index_en.htm

Here's OFT guidance on the consumer protection aspect of distance selling:

http://www.oft.gov.uk/shared_oft/business_leaflets/general/oft698.pdf 

Here's business link's advice:

http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1075742593&type=RESOURCES

 

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