VAT Ouch, its not what everyone enjoys, taxation, but in the modern world ensuring your business is accounting correctly and paying what they are required into the trading economies has become a fact of life. International trading and ecommerce are at an all time high, and as such the world is adapting itself to suit this mass continental shift of finance, bitcoins and money movements.
In this arcticle i am hoping to shed a little light on how fulfillment companies are obliged to co operate with authorities and ensure their customers are aware of the laws and regulations regarding trading within our own realm of the UK and Europe.
First of all i would like to advise that i am not an accountant but have experience with dealing with imports and UK taxation departments so as such i am offering my views, please do your own research and consult with a registered tax advisor before trading and to firm up what is required of you to ensure legal trading.
First of all let me be blunt and answer a few questions:
I am outside the EU and therefore i do not need to pay VAT?
This statement is incorrect, every company outside the EU utilising the services of a fulfilment house within the EU MUST be registered for VAT in the country or countries they are trading in.
If you are shipping customers goods from outside the EU then you still have to register for VAT subject to thresholds which are as low as £30,000 in some countries.
Do i Pay VAT on your services?
We do not bill our customers ouside the EU, VAT on our services, EU customers with a valid VAT number are billed on a reverse charge VAT system.
Can I use a back street fulfillment company?
From 2018 all UK Fulfillment Houses will have to register for the Fulfillment House Registration Scheme with HMRC, the authority who collects taxes in the UK, any company not registering will be trading illegally and liable to penalties, ultimately their business shut down.
This new directive has been bought in to clamp down on traders from around the world bypassing EU VAT regulations.
All Fulfillment houses will have to do background checks on all of their clients before allowing them to trade from their premises, checks will include identity, address and VAT registration checks. Storeship Limited are currently updating their own systems to ensure compliance with the new regulations.
I am based in the UK but not VAT registered?
As a UK based company we must charge VAT to all of our clients within the EU, except those outside UK with a valid VAT number who are applicable for reverse charge VAT.
Do I need a UK based company to trade?
NO, you do not have to have a UK company to trade just be registered with the authorities for VAT.
Where can I get help registering for VAT?
By utilising our Fulfilment services we are more than happy to help you set up your UK VAT number and register correctly, as well as offering advise on what you can claim back and how you can account for the VAT.