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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3814
Experience:  FCCA FCMA CGMA ACIS
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Hi, I have been operating a business in Spain since 2004 offering

Customer Question

Hi, I have been operating a business in Spain since 2004 offering Stag and Hen Weekends. I just generate the leads online and sell the weekends, pay the agents based in those other countries where the stag and hen groups travel too. Basically, I just take a commission as 80% of the funds are sent on to the agent. I have never had to charge VAT/IVA in Spain on the products I sell. I had to pay corporate tax in Spain but that's different.

I have just moved back to the UK, established a new company here and am doing the same thing, my question is do I have to charge VAT on the products I sell on behalf of the travel agents who are based in the other countries? I have looked on HMRC and its a mass of information that is very confusing when it comes to this sort of thing.

Just so I am clear with everyone. Agents ask me to market their products. I get enquiries and then sell the hen/stag weekend to the customer. Customer pays me to UK Ltd company, I pay the agent based in EU and I take the commission. Question is, do I have to charge VAT on the Stag Weekends sold to customers?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

To avoid charging VAT on your sales, assuming they are close to or above the VAT limit of 79K pa, the company would have to be located outside the UK, preferably in some convenient tax haven. Unfortunately such locations are big business and don't come cheap. They may work for Amazon, but are unlikely to be cost effective for you. Please remember that the VAT is chargeable on the full price, you cannot net your commission out and apply VAT to the lower total. In certain circumstances if you are selling within the EU and you have the other party's VAT or equivalent number then they can go through an EU Sales List the accounting treatment of which puts VAT on both sides of the ledger at the same time, effectively making the sale a zero rated supply. It's a pain in the backside to operate! Of you are selling outwith the EU then your sales are a zero rated supply in any case.
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Customer: replied 3 years ago.

Thanks Keith.


 


I am from Jersey coincidently which could be beneficial as I have contacts that would be Directors for free.


 


Thanks for your advice, will look into it.


 


Regards


James

Expert:  bigduckontax replied 3 years ago.
Well, there you are James, horses for courses.

Thank you for your support.

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