VAT advice needed

[ardvark]

Businesses outside the UK
There’s no threshold if neither you nor your business is based in the UK. You must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days).

dont sound gubrish to me at all.

but im not personally supplying any good or services. Im working for the affiliate company as a sole trader, and would only be claiming VAT back on advertising expenses etc...

 

[Deleted member 657006]

Who is the affiliate company? If they are asking you about VAT registration, they will likely have some physical presence in Europe.

Some of the larger affiliate networks have complex setups, with multiple entities, presumably to minimise their tax obligations.

why did you tell me off when you advise is near to mine​

what you said

This is terrible advice. Why would recommend asking an affiliate manager about VAT and not advise they seek professional advice from an accountant?

 

[Sephrata]

dont sound gubrish to me at all.

What you posted before was gibberish. You did not mention the UK and it's a far more complex issue that you realise. It depends on your agreement with the affiliate network whether there is a service supplied and your relationship with that network.

 

[Deleted member 657006]

but im not personally supplying any good or services. Im working for the affiliate company as a sole trader, and would only be claiming VAT back on advertising expenses etc...

seek profesonal advise mate ....

if you all ready got a accountant ask them they should no , there deal with it.

 

[ZionIce]

If you’ve got a business in the UK and you only make supplies to customers outside the UK, you can register for VAT on a voluntary basis.

 

[Deleted member 657006]

What you posted before was gibberish. You did not mention the UK and it's a far more complex issue that you realise. It depends on your agreement with the affiliate network whether there is a service supplied and your relationship with that network.

What you posted before was gibberish. You did not mention the UK and it's a far more complex issue that you realise. It depends on your agreement with the affiliate network whether there is a service supplied and your relationship with that network.

just asking , say you get to end of year and going to pay your tax but didnt understand the vat part do they add 20% to the 40% already paying so know you pay 60% .

is that fair to say can happen?

i always fort vat was a tax you claim back for the vat refund on services and items

i dont think my example correct ?

 

[TheAlmightyDada]

While I hope to come back to this topic a little later, with a cup of coffee in hand. I'll make a quick point now. You have stated that the majority of your income comes from the USA.

Just to clarify - are the payments you receive in your bank account, direct from the customers you sell to or are they from your affiliate network?

If it's the latter, the point of contention for the HMRC will be where the affiliate network resides.

I agree with what the others have said, go to a local accountant and explain the situation - BHW is wonderful, but nobody here (Including me) will take any responsibility if you take our advice and things go sideways. You will pay the accountant you meet and therefore be able to sue him if he were to give you shit advice.

I'll come back with a summary of what I think the situation may be later for your benefit though.

 

[Deleted member 657006]

While I hope to come back to this topic a little later, with a cup of coffee in hand. I'll make a quick point now. You have stated that the majority of your income comes from the USA.

Just to clarify - are the payments you receive in your bank account, direct from the customers you sell to or are they from your affiliate network?

If it's the latter, the point of contention for the HMRC will be where the affiliate network resides.

I agree with what the others have said, go to a local accountant to you and explain the situation - BHW is wonderful, but nobody here (Including me) will take any responsibility if you take our advice and things go sideways. You will pay the accountant you meet and therefore be able to sue him if he were to give you shit advice.

I'll come back with a summary of what I think the situation may be latter for your benefit though.

please reply to mine aswell cheers

 

[TheAlmightyDada]

please reply to mine aswell cheers

Which one was that?

 

[Deleted member 657006]

is this correct .

First, your standard personal allowance has increased from £10,600 to £11,000. This is the amount of income you can earn from any source — work, pensions or savings — before tax is owed. Also, you won't start paying the higher 40 per cent rate oftax until your income breeches the £43,000 mark, up from £42,385.5 Apr 2016

sorry got current version .

As expected, the Government is to raise the "personal allowance" to £11,850 in the 2018-19 tax year - up from £11,500 currently.

 

[Deleted member 657006]

Which one was that?

please ansaw this so i can understand it please

my example on over 40k a year income.

just asking , say you get to end of year and going to pay your tax but didnt understand the vat part do they add 20% to the 40% already paying so know you pay 60% .

is that fair to say can happen?

i always fort vat was a tax you claim back for the vat refund on services and items

i dont think my example correct ?

thank you for taking notice of me .

 

[Sephrata]

just asking , say you get to end of year and going to pay your tax but didnt understand the vat part do they add 20% to the 40% already paying so know you pay 60% .

If you should have charged VAT and failed to do so, then you are responsible for whatever the amount of VAT that your customers/clients should have been paying.

HMRC would never accept the argument that you did not understand VAT. This is why we have professional advisors.

At the moment, HMRC is on a mega crackdown with online sellers in the UK. They have obtained records from Amazon and issued notices to large numbers of FBA sellers (both in the UK and outside) that they did not register for VAT and failed to charge customers.

In this case, the OP needs to check his agreement with the affiliate network. B2B transactions are taxable where the customer belongs, not the supplier.

First, your standard personal allowance has increased from £10,600 to £11,000. This is the amount of income you can earn from any source — work, pensions or savings — before tax is owed. Also, you won't start paying the higher 40 per cent rate oftax until your income breeches the £43,000 mark, up from £42,385.5 Apr 2016

The current personal allowance is £11,500. Higher rate tax (40%) is payable on taxable income above £45,001.

Anyway, I don't understand the relevance here. You've gone from VAT to income tax...

 

[ardvark]

While I hope to come back to this topic a little later, with a cup of coffee in hand. I'll make a quick point now. You have stated that the majority of your income comes from the USA.

Just to clarify - are the payments you receive in your bank account, direct from the customers you sell to or are they from your affiliate network?

If it's the latter, the point of contention for the HMRC will be where the affiliate network resides.

I agree with what the others have said, go to a local accountant and explain the situation - BHW is wonderful, but nobody here (Including me) will take any responsibility if you take our advice and things go sideways. You will pay the accountant you meet and therefore be able to sue him if he were to give you shit advice.

I'll come back with a summary of what I think the situation may be later for your benefit though.

Thanks for the reply mate.

The payments are made to me from my affiliate network who reside in the Isle of Man.

i noticed this in the affiliate terms and conditions :

3.7. For VAT registered Partners: All Partner commissions are payable inclusive of VAT. VAT is calculated and shown on the Self Billing Invoice which is paid (including VAT) to the Partner . The Partner, is solely responsible for paying the VAT to the appropriate tax authority at the rate and manner deemed by law.

So am i right in thinking if was paid £8000 by my affiliate network, i have to take £1600 from that amount, minus VAT i have paid for Advertsing expenses, and the final amount is what i owe?

Obviously i understand if my Advertising expenses VAT paid is more, i can claim that amount back.

 

[Sephrata]

The payments are made to me from my affiliate network who reside in the Isle of Man.

So, you would have to charge them VAT if you exceeded the £85,000 threshold in a 12 month period (or expect to go over it in the next 30 days).

So am i right in thinking if was paid £8000 by my affiliate network

They should pay you £8,000 + VAT at 20%, so £9,600. If you go for full registration, then you would pay the £1,600 (less any VAT you claim back on business purchases) to HMRC.

If you go for the flat rate registration, then the affiliate network would still pay you the £9,600. However your payment to HMRC would be 11% of £9,600, so £1,056. The disadvantage with the flat rate scheme is that you cannot reclaim VAT on any purchases.

 

[ardvark]

So, you would have to charge them VAT if you exceeded the £85,000 threshold in a 12 month period (or expect to go over it in the next 30 days).



They should pay you £8,000 + VAT at 20%, so £9,600. If you go for full registration, then you would pay the £1,600 (less any VAT you claim back on business purchases) to HMRC.

If you go for the flat rate registration, then the affiliate network would still pay you the £9,600. However your payment to HMRC would be 11% of £9,600, so £1,056. The disadvantage with the flat rate scheme is that you cannot reclaim VAT on any purchases.

But the £8000 is already inclusive of the VAT, so i would have to deduct the amount from the £8000 surely?

Thanks for all the helpfull replies everyone by the way.

 

[Sephrata]

Does VAT show on the invoices already?

Most likely they don't include the VAT at the moment (because you cannot charge them it). Once you are registered, they will pay your commissions + VAT.

 

[ardvark]

Does VAT show on the invoices already?

Most likely they don't include the VAT at the moment (because you cannot charge them it). Once you are registered, they will pay your commissions + VAT.

Yes, thats what i stated, they are INCLUSIVE of VAT. So the £8000 would have the VAT included.

 

[TheAlmightyDada]

@Sephrata has done a superb job of explaining things, so I will not bother rehashing anything.


EDIT - OP, do you have other sources of income - as if this affiliate network is your only source you may be under scrutiny for IR35 as well. Depends on a lot of things - something else to talk about when you go to see an accountant. Make a note.

 

[Sephrata]

Yes, thats what i stated, they are INCLUSIVE of VAT. So the £8000 would have the VAT included.

I understand the agreement says that, but what about the invoices? The invoices have to show the VAT amount, rate, VAT reg numbers etc.

If the invoices have VAT on them already and you're not registered, then the affiliate network have committed VAT fraud.

 

[Deleted member 657006]

If you should have charged VAT and failed to do so, then you are responsible for whatever the amount of VAT that your customers/clients should have been paying.

HMRC would never accept the argument that you did not understand VAT. This is why we have professional advisors.

At the moment, HMRC is on a mega crackdown with online sellers in the UK. They have obtained records from Amazon and issued notices to large numbers of FBA sellers (both in the UK and outside) that they did not register for VAT and failed to charge customers.

In this case, the OP needs to check his agreement with the affiliate network. B2B transactions are taxable where the customer belongs, not the supplier.



The current personal allowance is £11,500. Higher rate tax (40%) is payable on taxable income above £45,001.

Anyway, I don't understand the relevance here. You've gone from VAT to income tax...

i was trying to understand the vat cost .

when you use a afflicate and you are vat registred , you can claim the vat the afflicate paid out , they give you a invoice and you give that to a accountant and it get deducated from your income earnt.

is that correct ?

vat is the tax used for buying or using a service or product the afflicate used.

thank you for this info grate understanding it properly.