Opening LTD, but not paying VAT/Taxes

[Achilles_95]

Hello, I’ve been willing to start an LTD in the UK. And I was planning to setup the OSS-system to pay European VAT aswell, because i sell to Europe aswell.

But I got in contact with a dropshipper who makes 100k+ in revenue each month. He told me that he doesn’t pay Tax, nor does he pay VAT. I asked how, he said it’s complicated but you need to set profit to 0$. And for the VAT, Europe doesn’t check that.

I was wondering how the government does nothing to him, but if I would pay 1£ less for the VAT I would get in big trouble.

Does someone know more about this??

 

[DangerJones]

Man, I would not risk it. It is absolutely not worth the BS.

 

[Panther28]

Man, I would not risk it. It is absolutely not worth the BS.

As someone that has cleared $110m as you say, i would expect more value than this comment. Anyway.

@Achilles_95 I had a little look at a few things, and the best i can figure out so far, is it depends WHO/HOW you collect your payments though.

You are encouraged to use a merchant of record so they assume all the responsibility of reporting and paying the EU. You just have to worry about UK tax after that, if you earn enough.

 

[Achilles_95]

Man, I would not risk it. It is absolutely not worth the BS.

As someone that has cleared $110m as you say, i would expect more value than this comment. Anyway.

@Achilles_95 I had a little look at a few things, and the best i can figure out so far, is it depends WHO/HOW you collect your payments though.

You are encouraged to use a merchant of record so they assume all the responsibility of reporting and paying the EU. You just have to worry about UK tax after that, if you earn enough.

They have a payment processor on the website (this payment processor can even accept illegal stuff). Afterwards this paymebt processor takes % and pays you out on Revolut Business or other.

I dont know surely how it works, but that is what they told me.

 

[leomarkou]

Hello, I’ve been willing to start an LTD in the UK. And I was planning to setup the OSS-system to pay European VAT aswell, because i sell to Europe aswell.

But I got in contact with a dropshipper who makes 100k+ in revenue each month. He told me that he doesn’t pay Tax, nor does he pay VAT. I asked how, he said it’s complicated but you need to set profit to 0$. And for the VAT, Europe doesn’t check that.

I was wondering how the government does nothing to him, but if I would pay 1£ less for the VAT I would get in big trouble.

Does someone know more about this??

That doesn’t sound accurate in most cases if you’re running an LTD and selling into Europe, VAT obligations still apply depending on thresholds and structure. I’d be very careful taking advice like that without proper tax guidance

 

[Panther28]

They have a payment processor on the website (this payment processor can even accept illegal stuff). Afterwards this paymebt processor takes % and pays you out on Revolut Business or other.

Avoid, its most defaintly a scam. No real legit business allows you to accept illegal stuff! lol

 

[Achilles_95]

That doesn’t sound accurate in most cases if you’re running an LTD and selling into Europe, VAT obligations still apply depending on thresholds and structure. I’d be very careful taking advice like that without proper tax guidance

But how do they know where you sell to without proof, if they use a special payment processor.

Avoid, its most defaintly a scam. No real legit business allows you to accept illegal stuff! lol

I thought the same until I saw more replica clothes sellers using this same payment processor. So i dont know how they do it, but it kinda works i guess..?

 

[larsdevries]

Hello, I’ve been willing to start an LTD in the UK. And I was planning to setup the OSS-system to pay European VAT aswell, because i sell to Europe aswell.

But I got in contact with a dropshipper who makes 100k+ in revenue each month. He told me that he doesn’t pay Tax, nor does he pay VAT. I asked how, he said it’s complicated but you need to set profit to 0$. And for the VAT, Europe doesn’t check that.

I was wondering how the government does nothing to him, but if I would pay 1£ less for the VAT I would get in big trouble.

Does someone know more about this??

But how do they know where you sell to without proof, if they use a special payment processor.

A lot of people online exaggerate or leave out the risky parts not paying VAT/taxes usually doesn’t mean it’s legal or safe long term

 

[RoyalCeres68]

wouldn't do it for large sums, if you're in the beginning it should be "fine" (still illegal)
also depends from which country you are and if they'll enforce it.

but its not worth the risk

 

[Panther28]

I thought the same until I saw more replica clothes sellers using this same payment processor. So i dont know how they do it, but it kinda works i guess..?

Nah. lol My job is done I warned you, you don't care, so now I don't care. If you get going you can learn the hard way that everything that sounds too good to be true, pretty much is. What i have learned that no matter how much people get scammed, more suckers still pop up believing scammers and their promises.

It sounds like YOUR content isn't legal though? Replicas are you selling? If so then may as well go use them. They are waiting for you! MUHHAHAHAH!

 

[Achilles_95]

Nah. lol My job is done I warned you, you don't care, so now I don't care. If you get going you can learn the hard way that everything that sounds too good to be true, pretty much is. What i have learned that no matter how much people get scammed, more suckers still pop up believing scammers and their promises.

It sounds like YOUR content isn't legal though? Replicas are you selling? If so then may as well go use them. They are waiting for you! MUHHAHAHAH!

It’s just I dont even sell replicas, and would need to pay tax and stuff. WHILE the people who sell those replica (this is already illegal), dont even pay all that shit. It kinda boils me

 

[Alis_]

1. some countries in EU have tresholds like "you don't pay VAT untill you cross 60k per year turnover", etc. (I don't know about UK)
2. using payment processor for "replicas" isn't some magic trick like - oh yeah this payments processor accepts "illegal stuff" it's not that simple, includes multiple layers of cloaking and steady flow of new payment processsor accs if something goes wrong
3. noone in their right mind would not pay VAT, Taxes or similar things if everything is registered under his name (hope you get what I meant...), unless.... he is in fact dumb or stupid or can only look short-term forward
4. you are thinking about doing something way of your current league to be honest with you, with no sugarcoating... stuff ain't simple as "illegal" payment processor and "just not paying VAT" cuz someone told me he doesn't

Think a bit about how these people might operate and you might figure out some things, big world ain't cute and friendly and there are people who really don't care about others

 

[KdoT_Resolute]

Your contact doesn't pay VAT/taxes because he don't have an LTD in UK, that's pretty obvious, and if he said he do, he is probably lying.

If you don't mind saying what you're dropshipping in Europe?

 

[affiliate08]

That sounds like survivorship bias tbh. Plenty of people “not paying VAT/taxes” just haven’t been caught yet.

If you’re running a UK LTD and selling to EU, VAT (including OSS if applicable) is your responsibility. HMRC and EU authorities do audit, and penalties can be severe (fines + back taxes + account issues).

Short answer: don’t copy that model. Do it properly or you’re taking a big long-term risk.

 

[petar186]

if u are making serious money you really should consider following the rules or bending them just don't avoid it

 

[hkrumar]

you can use UK company apprx for 1year without any taxes and then reopen a new one

 

[Numaro Accountants]

Hi VAT depends on what and who you are selling. Selling products from UK to EU are generally zero rated which means no vat.
It also depends either you are selling to customers (end consumers) or you are selling to business.

 

[NotableMoney]

UK one of the best and cheapest setup / solution, could work apprx 18 months, but also longer