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Sam, Accountant
Category: Tax
Satisfied Customers: 14199
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Hi I operate a business buying and selling media items online

Customer Question


I operate a business buying and selling media items online (mainly DVDs). I sell on one marketplace and then buy and dropship direct from another marketplace, so in effect I never actually handle the merchandise.

My turnover will now push me over the VAT threshold, but I need some help knowing what scheme to join. Due to the nature of my purchases getting VAT invoices is never going to happen. With so many orders from so many suppliers (not all of which themselves are VAT registered) I could never hope to keep up with them all.

I read about margin schemes but as I understand thats only for second hand goods and I deal purely in new stock. Is there a scheme I can join that allows me to pay VAT at a reduced rate as I will be unable to claim any input VAT back at purchase?

Also to make matters more complicated I am moving to Sweden in February. As far as I understand I would need to continue to pay VAT to HMRC but I would be taxed on my profits in Sweden as thats where I operate from?

Any clarity you can provide will be appreciated.

Submitted: 4 years ago.
Category: Tax
Expert:  Sam replied 4 years ago.



Thanks for your question and welcome to Just Answer. I am Sam and I am one of the UK tax experts here on Just Answer.


The scheme for you may well be the Flat Rate scheme as long as your turnover (income) is less than £150,000

This allows you to apply a flat rate to your sales which is lower than the standard rate, without the need to claim for VAT suffered.


I have added a link here from the HMRC website that explains the scheme - and its simplicity - but do feel free to ask any follow up questions.


However, if your turnover is more than £150,000 then I am afraid you will have to operate the normal VAT scheme, which means taking note of what charges you have incurred, and charging the appropriate rate on all sales.