In response to a previous thread HMRC were asked for further clarification. A person uploads content, the website sells it and pays a commission to that person. The website operations are classed as a b2b supply therefore no VAT is added by the website on the sale price. Instead VAT is added to the commission payout to the person who uploads content for their ‘agency service’.
1/ The website however should be charging VAT as without doubt they are setting the general terms and conditions of sale, would you agree to this?
2/ As the agent does not charge VAT, what is the implication to the people who have uploaded content, should they be accounting for the VAT on the price paid by the end consumer and submitting VAT returns, as they are making the B2C supply? ( presuming turnover + €10k )
HMRC’s response:If you are the host of a platform that allows third parties to sell services through, then you as the operator are liable to account for the VAT unless the following conditions apply:
-digital platforms and everyone else involved in the supply must identify who the supplier is in their contractual arrangements. ( website contracts do state they act as a collection agent )
-invoices, bills or sales receipts must identify that supplier and the service supplied (could be done)
-digital platforms must not:
-authorise the charge to the consumer ( could be argued the uploader authorises this )
-authorise the delivery ( could be argued the uploader authorises this )
- -set the general terms and conditions of the sale ( can’t see how the uploader would ever be able to set these, they can only set the sale price and have to agree to the websites very specific terms of sale, payments, refunds, processing, data security etc. )