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bigduckontax
bigduckontax, Accountant
Category: Tax
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Hi, I am a eBay trader. Is there a way of setting up

Customer Question

Hi,

I am a eBay trader.

Is there a way of setting up offshore company and not paying VAT?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question. However, I do need some data before I proceed.

Are you above or approaching the 79K level? Are you currently registered for VAT?
Customer: replied 3 years ago.

Hi,


 


Currently I turnover £500,000 a month.


 


Yes I am registered for VAT.


 


Is there a way of offsetting this 20% so I pay less and therefore can charge customers less.


 


Over the years more and more sellers with VAT numbers are somehow charging prices that non VAT registered sellers would charge.


 


Please advise.


 


Thanks

Expert:  bigduckontax replied 3 years ago.
The following advice is edited from UK Business Forums. To legitimately avoid UK VAT your distribution centre must be off shore. Many of the big CD and DVD retailers operate in this manner and also benefit from the better postal discounts which are often available. They post your purchases to you from a warehouse in say the Channel Islands or Gibraltar which you will recognise a well known tax havens, both outside the EU. The list is not exhaustive. The Isle of Man, for example, is outside the EU as well. If you warehouse in the UK, manage in the UK you will incur all UK taxes.

Now setting up in tax havens does not come cheap. It's big business over there and what with local directors, mandatory in Jersey for example, running the warehouse etc, compliance with local regulations the costs are going to rack up. Amamzon for example uses this method, but then they are very big!

I am so sorry to have to pour cold water on what would be an excellent idea were you trading at a multi national level. Always bear in mind Benjamin Franklin's adage that in life there are but two certainties, death and taxes!
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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