My tax knowledge never has been the best, so hopefully someone can help me with this query - HMRC were not very helpful..
A friend of mine has asked me for advice on the tax implications of selling books online. They are not VAT registered at the moment and do not need to be as turnover is not high enough.
They re about to start selling their own books and e-books online and want to ensure the pricing is correct to ensure all relevant taxes are accounted for.
They are UK based and their customer base will be worldwide.
Are there any import taxes they will have to advise their customers about? HMRC said they would have to ask this to all the countries and register appropriately in each country. This is impractical and I cant believe this is correct??
As mentioned before there is no export / VAT tax for them at the moment, they will pay tax on self assessment as normal, This is to clarify if their customers will be hit with any import tax.
Hopefully not a silly question and any advice gratefully received
Thanks
Jeremy
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I don't know about Books etc, but I do have a client who does import and Export. He registered immediately for VAT (accountant said so), this is so he can claim back the VAT import duty when the goods come into the country, (he's over the threshold now anyway). Is the friend just exporting books or importing them as well?
VAT is not charged to every country, USA and Australia are 2 that spring to mind that you don't charge VAT on, and normally if the goods are sent from UK to those 2 countries then it can be sent on someone like FedEx, with just a normal carriage charge.
My tax knowledge never has been the best, so hopefully someone can help me with this query - HMRC were not very helpful..
A friend of mine has asked me for advice on the tax implications of selling books online. They are not VAT registered at the moment and do not need to be as turnover is not high enough.
They re about to start selling their own books and e-books online and want to ensure the pricing is correct to ensure all relevant taxes are accounted for.
They are UK based and their customer base will be worldwide.
Are there any import taxes they will have to advise their customers about? HMRC said they would have to ask this to all the countries and register appropriately in each country. This is impractical and I cant believe this is correct??
As mentioned before there is no export / VAT tax for them at the moment, they will pay tax on self assessment as normal, This is to clarify if their customers will be hit with any import tax.
Hopefully not a silly question and any advice gratefully received
Thanks
Jeremy
Hi Jeremy,
Selling books online within EU is categorised as distance selling and if the seller is VAT registered, then UK VAT is charged, in the case of books =zero rate, e-books= standard rate. This is when the total sale is within a threshold of that EU country where your customer is based.
Where the sales are over the threshold then the seller may be required to register for VAT in that EU member state.
Please, note that if the customer is a business then the tax implications are different.
Outside of EU:
There is no VAT, zero rated in the case of books and for e-books= sale is outside of scope of VAT.
However in the case of books, the seller should be able to prove a genuine export, i.e. the goods left the UK and the address is outside of the EC.
It is beneficial for the seller of books to register for VAT as they will be able to recover input VAT on all business related purchases.
