Complications with ecommerce to Uk - advice needed

Woody60

Here's a conundrum and i can't work out what to do:
Situation:
1. Irish based company registered for VAT in ROI currently selling physical goods by ecommerce site in Euros to Irish individuals and companies.
2. Goods are supplied direct to customers (drop shipping) from (a) UK company charging me at zero rated VAT and (b) and Irish company at standard rate of VAT
3. Company wishes to expand business to UK.
4. Goods would be sold from a separate ecommerce site in sterling and delivered to the customer by UK-based supplier in most cases (occasionally from an Irish supplier).
Questions:
1. Is VAT chargeable on the goods sold to UK customers? At the Irish rate or the UK rate?
2. Would the UK supplier company have to charge the Irish ecommerce company VAT?
3. I would assume if a customer buys in the UK using a credit card the credit card processor would convert to euros and therefore there would be no need to open a UK bank account or set up a UK company initially (that might happened if the business is a success in the UK).
4. The complication might arise if a UK company buys from the site and wants an invoice for VAT purposes.

Peterdalkey

Very awkward topic! I would suggest that you study this and then pose your questions again, much is answered on this advisory. http://www.revenue.ie/en/tax/vat/leaflets/distance-sales-eu.html

dbran

Woody60 wrote: »

Here's a conundrum and i can't work out what to do:
Situation:
1. Irish based company registered for VAT in ROI currently selling physical goods by ecommerce site in Euros to Irish individuals and companies.
2. Goods are supplied direct to customers (drop shipping) from (a) UK company charging me at zero rated VAT and (b) and Irish company at standard rate of VAT
3. Company wishes to expand business to UK.
4. Goods would be sold from a separate ecommerce site in sterling and delivered to the customer by UK-based supplier in most cases (occasionally from an Irish supplier).
Questions:
1. Is VAT chargeable on the goods sold to UK customers? At the Irish rate or the UK rate?
2. Would the UK supplier company have to charge the Irish ecommerce company VAT?
3. I would assume if a customer buys in the UK using a credit card the credit card processor would convert to euros and therefore there would be no need to open a UK bank account or set up a UK company initially (that might happened if the business is a success in the UK).
4. The complication might arise if a UK company buys from the site and wants an invoice for VAT purposes.

1. The UK sales would be subject to Irish VAT up to the threshold for distance sales in the UK which is £70,000. If sales to the UK exceeds this amount then you are obliged to register for UK VAT and charge UK VAT on those sales.
2. If the goods are not leaving the UK then the UK supplier will have to charge you UK VAT on those supplies.
3. Perhaps.
4. Distance sales rules only apply to non business type transactions. If it is a UK company/business customer then you would invoice them net of VAT once you obtain their valid UK VAT number.

Best of luck with this.

dbran

Woody60

Brilliant reply. Very helpful.
Thanks a million.

Peterdalkey

The problem arises on item 4. If you are selling UK dispatched VAT-able goods to a UK VAT registered entity who wants to reclaim the VAT. You must opt to register for UK VAT to be able to charge UK VAT, it is the only way! But if you do this, as I understand it, you then have to charge UK VAT on all UK sales!! I sadly have first hand experience!!