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Sam
Sam, Accountant
Category: Tax
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I am starting a new business selling online, i have found a

Resolved Question:

hi. i am starting a new business selling online, i have found a supplier in Hong Kong who can drop ship products from china to my customers. my customers are mainly in uk with about 5-10% of sales going into the EU.
my question is this, if i go over the VAT threshold, i am liable to pay VAT on my products when sold, this will make it very hard to compete.
however, i have been told that as i am not physically importing the products and never actually see my products i am not liable for any VAT on them.
process goes like this, i receive an order, payment comes through to me, i then send the dispatch details and payment to my supplier in china who then ships the item directly to the buyer.
does this mean i am not liable to charge VAT on my sales?
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.

HI

Thanks for your question

As the goods will not come from within the EU - then this does fall within the usual distance selling consideration - but you do not then have to suffer VAT on the sale - however instead the customer may be charged both import and VAT by customs

So if you go over the VAT limit then you will not charge VAT

Let me know if I can assist further

Thanks

Sam

Customer: replied 1 year ago.
thanks for your answer, this does clear a lot up. does this mean i still need to get VAT registered if i go over the threshold? but then not charge to pay VAT
Expert:  Sam replied 1 year ago.

Hi

Thanks for your question

Only if any Vatable supply exceeds the threshold. So if ALL your sales are like this - then none of these sales count towards the VAT threshold

Do let me know if I can assist further but if you have all that you need, it would be appreciated, if you could rate me for the level of service I have supplied (or click accept)

Thanks

Sam

Sam and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
great. i will do. do you offer any accounting services for small businesses?
Expert:  Sam replied 1 year ago.

Hi

Thanks for your response and rating the service.

Although I do run my own business I am afraid that as part of the terms of working for Just Answer we cannot take clients on directly though affiliation from this site.

Thanks anyway

Sam