Anonymous
Share this content
12

VAT Postage Stamps

Didn't find your answer?

I sell board games around the world, and when I purchase postage from the post office it is exempt from VAT, but i'm supposed to recharge postage at 20% to customers. However, I get my sales through to my paypal account, which costs money and losing out money because the postage costs are so high and thus im making little profit. What i want to know is, when the sales come through to xero, can i proportion the sale and split it so the postage amount of the sale is VAT exempt too? for example, if i make a sale of £39.94 as 19.99 incl vat (£4) and 18.95 which would be the postage amount as tax exempt. is this allowable? Thanks

Replies (12)

Please login or register to join the discussion.

By ireallyshouldknowthisbut
25th Sep 2020 10:06

On the postage, its an "it depends" type question. Assuming a UK customer, if you charge the exact postage sum (which is rare) you can exempt the VAT. Generally you charge "postage and packaging" as a single sum, and its standard rated.

The wider question is if you are retailing 'around the world' why are your charging VAT on those sales in the first place?

And the ever wider question is "why are you using paypal as a payment processor"? given as you say their ludicrous fees

And if you are not making a decent profit on the sale, why are you offering the goods for sale at that price?

You could transform your business with a half competent advisor.

Thanks (0)
Replying to ireallyshouldknowthisbut:
Psycho
By Wilson Philips
25th Sep 2020 10:13

Quote:
You could transform your business with a half competent advisor.

And turn it into something even more profitable with a fully competent advisor. You'll find plenty of the former on this site - you may need to look a little harder for the latter ;¬) ;¬)
Thanks (2)
Replying to Wilson Philips:
avatar
By JohnB99
25th Sep 2020 10:28

well it's only a part time on the side sort of job so it was just a small question of interest, i'm not looking to get any expensive advisors involved lol

Thanks (0)
Replying to JohnB99:
Hallerud at Easter
By DJKL
25th Sep 2020 10:36

If that small a business why did you register for vat in the fist place, were you actually required to so do or was it voluntary? Should you even be registered?

Maybe worth talking with an accountant about these sorts of issues before delving into the vat on postage issue , in that regard you possibly ought to read this notice.

https://www.gov.uk/guidance/vat-on-postage-delivery-and-direct-marketing...

Thanks (3)
Replying to JohnB99:
.
By Cheshire
25th Sep 2020 11:28

Small question (in your view), can to lead to very expensive mistakes.

Professionals often prove their worth in saving you from yourself and from the harsh penalties imposed by HMRC. Does sound like you are making a few mistakes already.

If you don't want to pay someone please refrain from asking those same professionals any questions (Aweb ....for Accountants)and expecting answers for free.

Thanks (2)
Replying to Cheshire:
avatar
By Paul Crowley
25th Sep 2020 12:02

Could not agree more
Op sounds as if he would not get a solictor involved if accused of manslaughter LOL.

Thanks (3)
Replying to ireallyshouldknowthisbut:
avatar
By Bobbo
25th Sep 2020 16:24

Quote:

On the postage, its an "it depends" type question. Assuming a UK customer, if you charge the exact postage sum (which is rare) you can exempt the VAT. Generally you charge "postage and packaging" as a single sum, and its standard rated.

I thought that, where delivery was part of the contract, VAT on delivery followed the VAT status of the goods supplied?

Thanks (2)
Replying to Bobbo:
avatar
By Paul Crowley
26th Sep 2020 14:03

I think it is not grey but but one shade short of black
The person who posts using royal mail,( and royal mail only) can treat postage stamps as a disbursement. That is exact to the penny stamps.
Everything else VAT as per goods

Does Royal mail still exist?

Thanks (0)
avatar
By Paul Crowley
25th Sep 2020 12:11

DIY often means misunderstanding the rules
VAT on UK and EU sales
Others outside scope
£85,000 income on UK and EU
That is a full time trade. half an hour on a free call to an accountant will enlighten you

EDIT
I you read my prior answers quite a few say
It is a tax on DIY
Have you any idea how many idiots register for VAT because they can get back VAT on the expenses without looking or understanding the income side

By idiots I mean people without appropriate accounting knowledge

Thanks (0)
avatar
By zebaa
25th Sep 2020 12:31

to the OP: Think about de-registering, if your T/O allows. All the details on HMRC site. One further suggestion. Keep an eye on the news about vat & T/O & take the time to know how T/O is calculated for vat, it may not be as you think .

Thanks (0)
Replying to zebaa:
Hallerud at Easter
By DJKL
25th Sep 2020 12:41

Surely such advice really depends upon where the various sales go to, the standard/exempt mix etc, and who are the customers- methinks it is still "Go to Accountant, Go directly to Accountant, Do not pass Go"

Thanks (2)
avatar
By Paul Crowley
25th Sep 2020 19:19

Are you making a profit on VAT?
Buying UK and selling mostly to Johnny foreigner, Not UK and EU
If so fair play

https://www.gov.uk/guidance/vat-on-postage-delivery-and-direct-marketing...

Thanks (0)
Share this content

Related posts