VAT when selling through RedBubble

Dynoben

Hi,
I've recently started selling a few items through RedBubble. My company is already registered in the UK for VAT so I have provided RedBubble with my VAT number.
I'm struggling to get my head around what I need to declare on my VAT return in terms of these sales. There have been sales to people in the UK, elsewhere in the EU along with people outside of the EU.
I believe RedBubble was initially based in Australia although I can see that they are also registered as a company in the UK and also for UK VAT (if that makes any difference).

My accountant is saying that I need to do the following:

For an example sale to UK customer that has a price excluding VAT of £26 (£31.20 inc VAT) including the 30% margin of £6 for me.

1. RedBubble should be paying me my margin of £6 +20% - £7.20.
2. I will then declare the gross sale value (£31.20) paying the full VAT amount on the sale (£5.20).
3. Include costs of the of £24 gross, £20 net and £4 VAT to claim back.

Resulting in a net VAT payment of £1.20 for that sale.

Does that sound about right or do I only need to worry about the £6 margin and ignore the rest of the sale value? The following text included in the RedBubble email confirming a sale seems to suggest that it needs to be on the full amount, not just the margin:

"You will need to make a note of this Retail Price to calculate whether you have breached any indirect tax registration thresholds based on your total sales."

Is the above example the same if the sale was to someone outside the UK but still in the EU? i.e. UK VAT still applies?

I'm presuming sales to customers outside of the EU will not be liable for VAT?

Thanks for you help!
Ben

TheCyclingProgrammer

What are you selling? Goods or services?

Are RedBubble acting as the principal or the agent in the transaction?

Your accountant presumably has more knowledge of your exact situation than anyone here so why don't you trust their advice?

agrinnall

Surely the £1.20 is the VAT on the £6 margin, but your accountant is saying that you have to record all parts of the transaction, presumably so that you can justify the level of VAT payment made should HMRC audit you.

Dynoben

Thanks for the quick reply :-)
It's all goods (t-shirts, phone case etc), I just provide digital images to RedBubble.

I think Redbubble is acting as an agent as they say:

"Redbubble collects proceeds on behalf of the artist and deducts Redbubble’s service fee, shipping costs and the supplier’s manufacturing fee, before paying the remaining funds to the artist (Artist Margin)." (my emphasis - I'm not allowed to post a link)

I think this scenario is new to my accountant so they are trying to work it out. I thought it would be worth a 2nd opinion! Having a record of the correct practice on this forum might save someone else the confusion I've been having with this.

As it stands RedBubble haven't paid me the extra £1.20 described in the initial example (on any EU sales) so I'm trying to work out if this is an error at their end or not.

polymaff

Your company contracted / made a £6 return on a zero-cost sale. If there is a VAT liability then isn't it £1? (i.e. your company's sale was £5 plus VAT).

What does the payment breakdown info say? Does the company's VAT number appear in the payment settings?

Husman123

Reviving this post as it is relevant to my situation and I am struggling to find a clear answer regarding how to declare my income from Redbubble.

For example, if I made 200 sales in 1 month and the total retail value was £500, my artist margin for that month might be £150, that's how much would be deposited into my account. In regards to declaring my income, do I show my income as £500 with £350 expenses, or would I just show my £150 artist margin as income?

Since there is no material or upfront cost for selling on Redbubble, I was under the impression that my artist margin is my income?

If there is anyone that could provide some information on this I would greatly appreciate it! I'm sure there are other Redbubble artists who would also benefit from knowing this.

Many thanks!
Hus

bebopuk

Did anyone find the solution to this? 
Many thanks
Lee

namieco

I sell a lot through Redbubble. 
I declare all the profits as income, as it's print-on-demand its pure profit with no expenses.
I don't earn enough to be VAT registered so can't help with that, if you're earning that much an accountant seems sensible.