Will I need an accountant?

IronWolf

I am in the process of launching a new product for my business, which I operate as a sole trader and which up to now has been fairly straightforward in terms of expenses and revenue, which comes from advertising.

However I am soon launching a product, which is a membership to my website which allows users to use a spreadsheet to analyse data which I will license from a US company.

Most of my customers will likely be in the US and pay through Paypal.

I am not sure of some of the tax implications of this, for instance will I need to charge VAT if my sales go over the threshold? I can sell it as a membership, but I am actually selling the user the ability to access the data and use the spreadsheet I have created.

I will be incurring licensing costs from the outset and will probably lose money until the membership numbers start to grow so trying to keep expenses to an absolute minimum.

Will I need to consult with an accountant from the outset and have them handle the accounts, or do you think I can get away with just hiring one to do the standard end of year tax return.

Thanks

paddyrg

I'd say if you're unsure, it's worth seeing one! Your first visit is a sales call for them, they will give you an idea of what services they can provide etc. You may find you find it easier to let them handle certain things like company formation, year-end etc. They will do as much or little as you ask, so for instance I deal with my accountant each year-end, but the quarterly VAT etc myself.

martindow

If you do consult an accountant you need to be sure they are a specialist who has experience and knowledge of international businesses like yours.

I'm sure there was thread a few weeks ago from someone running a similar business and whether they needed to register for VAT which might be worth looking at if someone here can find it. I've failed searching for it.

Atidi

IronWolf wrote: »

I am in the process of launching a new product for my business, which I operate as a sole trader and which up to now has been fairly straightforward in terms of expenses and revenue, which comes from advertising.

However I am soon launching a product, which is a membership to my website which allows users to use a spreadsheet to analyse data which I will license from a US company.

Most of my customers will likely be in the US and pay through Paypal.

I am not sure of some of the tax implications of this, for instance will I need to charge VAT if my sales go over the threshold? I can sell it as a membership, but I am actually selling the user the ability to access the data and use the spreadsheet I have created.

I will be incurring licensing costs from the outset and will probably lose money until the membership numbers start to grow so trying to keep expenses to an absolute minimum.

Will I need to consult with an accountant from the outset and have them handle the accounts, or do you think I can get away with just hiring one to do the standard end of year tax return.

Thanks

You can't charge VAT unless you are registered for VAT.

If you are registered for VAT, you must charge VAT on all Vatable supplies at the appropriate rate, irrespective of whether your business is turning a profit or a loss.

In the circumstances, I think you would be extremely wise to procure the services of a good accountant

IronWolf

Atidi wrote: »

You can't charge VAT unless you are registered for VAT.

If you are registered for VAT, you must charge VAT on all Vatable supplies at the appropriate rate, irrespective of whether your business is turning a profit or a loss.

In the circumstances, I think you would be extremely wise to procure the services of a good accountant

Yes I understand the VAT rules except for whether what I am selling is a VATable product or not.

How does one find a good accountant with knowledge of international sales?

Laurajo_2

Most will offer a free initial consultation, where you can grill them.

Also, ask for recommendations as a starting point.

antrobus

IronWolf wrote: »

.....However I am soon launching a product, which is a membership to my website which allows users to use a spreadsheet to analyse data which I will license from a US company.

Most of my customers will likely be in the US and pay through Paypal.

I am not sure of some of the tax implications of this, for instance will I need to charge VAT if my sales go over the threshold?.....

If your sales exceed the VAT threshold you will have to register for VAT. But it looks like you're selling a service, and most of your customers will be in the US, so goodness knows whether or not you'll have to charge them VAT. The VAT rules on the export of services are notoriously complicated.

So yes, it's the kind of thing I'd get sorted out with a proper accountant.