VAT registration threshold and overseas sales

toao

Hi,

I have just been going over my books for the past 12 or so months and it appears that i have gone slightly over the VAT registration threshold on a couple of occasions over a rolling 12 period.

Am i correct in thinking that i do not include any international sales when calculating my turnover for VAT registration? If so then this would take me below the threshold.

Also i trade mostly on Ebay. Is there anyway of getting a report of transactions through Ebay or Paypal with a breakdown of UK and International sales?

Thanks for your help

nikki1520

You must include all sales- international or not. However, no vat is due on international sales if you can prove the export. If you sell to companies in the eu, you can zero rate the sale if they give you their vat number. However, you must charge vat to private customers and. Non vat registered companies in the eu.

If you go over the registration amount, but this is a one off blip in sales, you can apply for an exception from registration. However, if this has happened more than once, you need to be registered.

Can't help on the eBay report- try asking on the eBay board. Soolin or hammy may be able to give you some advice

toao

Am i reading this wrong then - Taken from the HMRC website-

You supply goods or services from the UK to other countries

If you supply goods and services both inside and outside the UK, then you may need to register for UK VAT if the value of your UK supplies alone exceeds the registration threshold.
You don't need to include supplies you make in other countries when calculating your VAT taxable turnover for registration purposes - so leave out of your calculation any goods and services you supply where the place of supply is another country rather than the UK.

nikki1520

This is down to the place of supply of services rule. Basically some services are supplied where performed, so of you provided these services in Saudi Arabia, you wouldn't count them. Goods are only included if an integral part of that service

It is unlikely this applies to you if you are selling items on ebay

toao

Strange, Very confusing, I did initally think that it was the case that i would have to register, then i read this on UK Business Forums

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=222861

Are there any other exceptions e.g. payment processing fees as i have not actually taken this money then paid it out, It is deducted before i receive the payment for goods?

nikki1520

No, you cannot deduct the cost of doing business before calculating your turnover. And if you ship to other EU countries, you may well be liable to register there as well - the thresholds start at about 28000 EUROS

Best advice is to write to HMRC. Then you get an answer in writing. If the answer is wrong, you've got proof of what you have been told and have been "misdirected"

toao

Ok will do that thanks

seismicryan

nikki1520 wrote: »

You must include all sales- international or not.

I literally just had my first VAT inspection today.. until today I also though you only included UK sales, or anythnig that hit UK soil, on the VAT return... i was set straight!!

Ryan

steve1980

If you're making that much money that you're going through the VAT threashold then you should have an accountant.

terra_ferma

seismicryan wrote: »

I literally just had my first VAT inspection today.. until today I also though you only included UK sales, or anythnig that hit UK soil, on the VAT return... i was set straight!!

Ryan

I've just been on a training course run by a vat specialist from HMRC, specifically on international trade, and I was very clearly told foreign sales don't count towards the limit for registration (that was the whole purpose of me attending the course, so I discussed it with the tutor).
They confirmed that it's even possible to have a multi-million pound turnover and not have to be vat registered, if sales to the UK are below the threshold (e.g. an export business).

HMRC don't monitor foreign sales at all, if you are not VAT registered. You should register in another country if your sales to that country exceed their registration limits, which vary from country to country (can be found on the HRMC website).

However IF you are registered you have to include all sales in your VAT reports.

I strongly recommend anyone trading internationally to attend these courses run by HRMC, they are free.