If someone has ebay and amazon accounts in different countries eg amazon.in, do they have to meet VAT and tax obligations in those countries, or do they account for their VAT in UK only?
Just realised you mentioned tax too. Complex and not enough info provided I'm afraid. We need a lot more info pls. How far have you got with your investigating?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you for replying. I have been approached by a prospective client who has already reached VAT t/o limit in UK sales, but has additional ebay and amazon accounts in different countries which are all accounted for separately. Sales are small electrical items, at moment all online sales within EU, but using the country specific sites.
-- Edited by Glitterbin on Thursday 14th of April 2016 10:56:57 PM
Hi Elizabeth
Out shortly so quick one. I notice that when you joined the site you didn't provide an into so it's difficult to know where to pitch this. So perhaps a few words about you...background, how long in the business, any specialisms, accountant or bookkeeper, which body you are with, if any.
Also, sorry when I meant investigations, I meant with ferreting round eg HMRC or have you just asked on here so far?
Also still need quite a bit more info on your client. Limited or sole trader. Does he manufacture and sell the parts or buy in to from uk.or is he involved in purchasing from outside uk and if so from where. When he trades via other countries amazon etc sites (why btw, think I can guess), does he supply the goods from the uk, or does he have bases abroad? Are there limited companies abroad? Or via agents/ distributors.
Is he just dealing with eu member states or involved in exports elsewhere?
When you say accounting separately, how? Is he registered for and paying tax in these others countries.
Few more I can think of but no time now, that's probably enough food for thought for you for now, although you may already have all these answers.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
The example that you used was Amazon India? (don't you need to have an Indian bank account and local presence for an Indian Amazon account?).
What is the place of supply? i.e. the platform may be in (say) Germany but where are the goods shipped from?
Is this a drop shipping company? (i.e. buy in China, sell in America, Amazon takes care of the logistics without the goods ever landing in the UK?).
Is your client currently paying taxes in the other EU countries?
Is your client already VAT registered in other countries (i.e. if they do business in Spain don't they need to be registered for VAT in Spain from £1, remember that the VAT registration threshold is country specific with some countries having no threshold and different VAT rates or VAT rate equivalents (i.e. US Sales taxes, local and federal)).
As Joanne says, the site would need lots more details in order to help and this is one of those cases where the help may just be pointing you to the right documents as its quite a big topic.
This is a potentially really useful and interesting topic that people (myself included) could learn a lot from as it's an area that will become much more important to UK based bookkeepers and accountants so I'm hoping that this thread really takes off.
Right, Joanne's already involved... What bait do we need to lay to attract Les Howard to this thread?
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Oops, wrote my reply before popping out on the school run but didn't post until I returned. I think that the posts are complimentary though Joanne rather than covering exactly the same ground so I'll leave mine there.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Is your client already VAT registered in other countries (i.e. if they do business in Spain don't they need to be registered for VAT in Spain from £1, remember that the VAT registration threshold is country specific with some countries having no threshold and different VAT rates or VAT rate equivalents (i.e. US Sales taxes, local and federal)).
Hi Shaun
The EU has distance selling thresholds, just checked and Spain is 35000 euros. I think it's to avoid having to register unnecessarily for small amounts.
Never had any call to do any business with Spain John and have no clients who have either but I really thought that it was from £1 in Spain. There you go, as mentioned in my post
"This is a potentially really useful and interesting topic that people (myself included) could learn a lot from".
Many thanks for the link, I'll have a read through that in a bit.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Right, Joanne's already involved... What bait do we need to lay to attract Les Howard to this thread?
I was going to see what answer I got from Elizabeth and suggest she look at contacting Les. I noticed Les was online via the Swedish tax one so thought he might be attracted to this one too, but is maybe waiting for it to play out a bit more/for more info from the poster.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Sorry all, HUGE thanks for all the interest. I am an unqualified book keeper, having worked for my oh have used the skills to work with other clients in construction industry, so buying and selling is a black hole for me. Client is a sole trader, purchasing from China, delivered to UK and shipped individually to other EU countries (sorry the amazon.in was an error) such as Spain, Italy, Germany etc. As I have not taken on the work yet, can only say that I think they are not registered for any taxes outside UK and not yet VAT reg in UK but must with urgency. Thinking I've bitten off far more than I can cope with.
Hi Elizabeth I would suggest that you are qualified by experience (but that QE is restricted to the construction industry).
I'm all for expanding knowledge, but sometimes gaining the knowledge required can be a step too far if it needs to be gained in a very short space of time via a potential clients knee jerk reaction, which in this case is the required VAT UK registration.
Never mind the potential for having to register in the other countries and maybe having to cover off why he hasn't already. (Need more info here)
Plus the fact that you now have another interesting scenario in the mix, that of dealing with importing and the import processes, including (but this is by now means all of it), Chinese invoices, import duty/VAT. With that.....should he be looking at importing all straight into the UK and shipping out again or are there more cost effective and VAT effective ways of doing this. Is he also dealing with VAT registered businesses in the EU when he sells on? Can he claim onward relief.
Ignoring the EU VAT issues for a minute, does he trade in other currencies and do you have the software to cope with it as well as the knowledge?
There are far too many questions to list here just now as we cannot pin point them to your client as we don't really have enough information to go on. But the main question for now is - are you (or have you) agreed to do this work, or do you think it might be better in this instance to pass this on to someone who has experience in this field? There are certainly easier clients to cut your teeth on to expand your business from it's current knowledge base.
I would suggest dealing with just Amazon in the UK with no import/export implications would be a good one to start with - can be bad enough with no knowledge. (Usually only due to the fact that customers rarely give you what you need to process such work and it can get very messy!) Or one who imports from outside Europe but sells purely into the UK. But I do appreciate you can't get those sorts of clients just by wanting them.
So, if you are determined to take this one on, make sure he also has a Chartered Accountant to advise him from now (not at year end!), plus I would also get Les Howard on board. Les posts on here, do a search for him, he is a VAT expert. Or PM me and I will give you his contact info.
Plus I would suggest you read up, and this is just for starters, the following from HMRC....VAT guides around sales to EU (both to vat registered and non registered customers), how to verify VAT registrations of customers, HMRC full import and export guides including information about claiming back import VAT via C79s, how to process EC sales lists. There is a wealth of information on HMRC. Added to that there are other issues I would suggest you consider reading up on and I can suggest a further list if you get that far.
Also - be interested to know on what terms he imports - is he fully protecting himself and his business in the event he doesnt get what he has ordered from China? Ie what import terms and what documentary process does he follow - would he be expecting you to assist?
Does he have a bookkeeper/Accountant now and why is he moving? Im guessing he has probably done it all himself - so the question also has to be, how has he been tracking sales/purchases so far (likely you could also be inheriting a mess to sort so you need to have time to do that)
You would also need perhaps need to notify your PII cover about taking this one on, given you have no knowledge of the sector - worth a check of their terms.
Once you have gained some further information from your proposed client, feel free to post here of course. Its a great one to learn from, but whatever you do, make sure you do not accept it until you have a whole raft of answers to what will be a very long list of questions, so you know exactly what you are getting yourself into. I would also suggest you dont offer a fixed rate fee!
Looking forward to an update on this one, including as to whether you take him on or not, so can you let us know?
-- Edited by Cheshire on Friday 22nd of April 2016 08:04:40 AM
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
