VAT on UK sales delivered within the UK

stapolinhosting

Hi guys,

I have a question about how I can account for VAT on sales I make to UK customers.

I am in the process of setting up a small wholesale business. I have a set up a distribution center in the UK for deliveries to UK customers. The goods will never touch Irish soil if ordered by a UK customer.

Now, the problem I am having, is finding out how the whole VAT bit would work. I called the revenue to ask them, and their answer was 'oh, this is distance selling, god I have no idea'. Not exactly the answer I was looking for.

I am VAT registered and basically what I need to know is how do I account for VAT in my books for goods that never leave the UK or come anywhere near Ireland.

Would I need to set up a UK business and register for UK VAT from my Irish address and go by the UK VAT rates and then calculate my income tax for the Irish revenue.

Im very confused at with it all at the moment, and hoping that someone here will have an answer of some sort so I can move on to the next stage of setting up because the Irish revenue have 'no idea'.

best regards

aidan.connolly

Hi,

I don't have a vast experience in Vat, however you may have to register for Vat in the UK if you exceed the Thresholds.

You should contact the HMCE in the UK as they are helpful.

Good luck with it.

TheInquisitor

Consult your accountant. If your sales from that distribution centre are more than £75k per annum then you'll have to register for VAT over there. But either way you'll have to have that set up as a separate company. Everyone has subsidiaries abroad and all have to be different entities. Get on this ASAP otherwise you could be fined heavily by HMRC, their not exactly being very understanding atm with the current state of their books. It'll only cost a few hundred to have a comapny set up and then a few grand a year to the accountants and auditors

stapolinhosting

I finally got an answer from the revenue here in Ireland.

Basically, I can do it all from here in Ireland without the need to register for UK VAT.

The way it works is Everything I purchase in UK (goods) is zero rated VAT.

If I sell to a VAT registered UK business then their purchases from me are Zero rate too.

And the only 2 times I need to add VAT to orders are for persons/businesses in Ireland (whether or not VAT registered) and UK buyers who are not VAT registered.

Because my base price on the products will be in GBP I will have to make sure I know the exchange rate on the day of purchase/invoicing so I can calculate it correctly for my VAT returns. I have managed to work out a thing in Excel for invoicing and all I have to do it enter the exchange rate and it will show the totals in both EUR and GBP, and I have also done the same on the webite, only problem is, i can't manage to get to to show in 2 currencies on the checkout part of the website, so until I figure that out, i'm just gonna have to keep doing it in excel.

Cheers for the reply

Best regards

stapolinhosting

TheInquisitor wrote: »

If your sales from that distribution centre are more than £75k per annum then you'll have to register for VAT over there.

I discussed this with the revenue and they said that it is just considered a distribution outlet, just as if I was sending the goods from Ireland. but because the sales are being taking in Ireland by an Irish seller it should all be done from here.

In saying that, setting up a business in the UK and being UK VAT registered is something I will look into further as the business grows.

Cheers

aidan.connolly

Hi

A word of caution.
When I purchase goods in the uk and then bring them into Ireland. The supplier in the UK Zero Rates the supply of the goods because they are leaving the UK. However if I order goods and have them delivered in the UK, then the I am charged UK vat because the goods don't leave the UK. The exclusion to this rule is if the goods you sell are themselves subject to the Zero rate of Vat in the UK.

Aidan