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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am in the throes of starting an online business.

Customer Question

Hello,
I am in the throes of starting an online business. I need some advice around VAT and how I should be advertising pricing and charging VAT.
Background:
- Company is registered in the UK. Not VAT registered yet as we are just starting out.
- Website servicing customers globally
- Stock is held in Japan and shipped directly to the end customers address
- No stock passes through company hands, all stock is directly shipped from manufacturer to end user/customer
- Expected average order value (before any tax) <£40 per order.
Can you please advise the following:
- How should I advertise the pricing, one pricing for all orders regardless of location (eg: before tax or including UK VAT)
- When do I apply UK VAT?
- When do I apply country of delivery tax (eg: USA/Australia/EU)
Thanks in advance,
Michael
Submitted: 11 months ago.
Category: Tax
Customer: replied 11 months ago.
It didn't appear to save all of my question - please find full question below:Hello,I am in the throes of starting an online business. I need some advice around VAT and how I should be advertising pricing and charging VAT.Background:
- Company is registered in the UK. Not VAT registered yet as we are just starting out.
- Website servicing customers globally
- Stock is held in Japan and shipped directly to the end customers address
- No stock passes through company hands, all stock is directly shipped from manufacturer to end user/customer
- Expected average order value (before any tax) <£40 per order.Can you please advise the following:
- How should I advertise the pricing, one pricing for all orders regardless of location (eg: before tax or including UK VAT)
- When do I apply UK VAT?
- When do I apply country of delivery tax (eg: USA/Australia/EU)Thanks in advance,Michael
Expert:  bigduckontax replied 11 months ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
You do not need to register for VAT until the aggregate of you standard rated, reduced rater or zero rated supplies reach or approaches the VAT Threshold, currently 82K. Sales to buyers situated outside the EU are exports and zero rated. Supplies within the EU are effectively zero rated if you have the buyer's VAT number or equivalent and employ the reverse charge where you charge VAT at the standard rate (20%) and recover it immediately as input tax. Sales to UK customers are standard rated; you must charge VAT at 20% and account for this to HMRC on line on a quarterly basis.
I would suggest that you advertise your wears at net price, but subject to VAT.
You do not need to apply to destination countries; they will deduct customs duty and any taxes and put the items in bond and release on payment.
I do hope my reply has been of assistance. For some inexplicable reason your question was listed twice on the same thread!
Customer: replied 11 months ago.
Hi Keith,Thank you for your reply, however I do have some questions.All of my customers, both domestic and abroad will be end users, as such it is a B2C transaction. With this in mind there will be no EU vat number. As I right to assume that UK VAT will be applicable? Or will it be the in country Tax, eh: Switzerland VAT equivalent?In regards ***** ***** goods shipped abroad, I want them to arrive to the customer without delay, as such will charge the specific local country tax.Do you know where I can find information on country taxs? Eg: Aus is 10%GSTThanks,Michael
Expert:  bigduckontax replied 11 months ago.
Yes, you are correct Michael. For EU customers who have no VAT or equivalent number where the reverse charge system may be used then UK VAT is charged at the standard rate.
When you ship abroad you attach a self adhesive customs label, obtainable at any Post Office, which declares the content, weight and value. This label is not required for shipping within the EU as there is no customs etc duty levied on receipt. That is the original idea of the EU, no inter state tariffs thus you do not require the data from other EU countries which, in any event, can be found using Google or some other search engine.

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