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eBay Dropshipping and UK VAT

Discussion in 'Business & Tax Advice' started by SantaInThailand, Mar 8, 2016.

  1. SantaInThailand

    SantaInThailand Junior Member

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    Hey guys,

    I've recently started Amazon to eBay dropshipping in the UK and wondering what's the deal with VAT.

    As many of you know this business model is based on volume with minimal profits per transaction and paying any % of VAT on top would make it impossible due to the low profit margins. However, with this volume the £82k treshold is reached very quickly.

    For the record, I am not a UK national or resident and don't have any plans to visit the country either. I receive payments via PayPal and purchase items on Amazon with my UK debit card. I am not registered as a sole trader and don't have a company either.

    However, it seems that not being based in the UK actually makes things even worse, as according to gov.uk in this case the treshold is 0 so anyone who is making business in the UK but not based there must register for VAT:

    9.3 When must an NETP register for VAT in the UK?
    From 1 December 2012, if you make any taxable supplies (see paragraph 2.3) in the UK, you must register for VAT here, and account for any UK VAT to HMRC.

    Anyone know how the big UK dropshippers are handling this? There are clearly lots of people doing this and many doing volume exceeding an estimated turnover of £1m per year. Do these guys just fly under the radar? Is there a risk of e.g. PayPal reporting something to the tax authorities and closing my account? How big is this risk?
     
  2. Systemagician

    Systemagician Newbie

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    Did you have any joy with this facing the same dilemma
     
  3. pcobyrne

    pcobyrne Registered Member

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    I can put you in touch with a Chartered Accountant who will be more then happy to answer your question and their are many many ways around this situation...which I use and stay legal. No I will not explain them here in detail but this guy may be able to help. He is NOT related to me NOR do I currently use him......but he knows his stuff and is shit good. I am sure he will answer your question...Hit me up if you want his details..
     
  4. pcobyrne

    pcobyrne Registered Member

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    May I also point out the following:
    Circumstance Threshold
    VAT registration More than £83,000
    Registration for distance selling into the UK More than £70,000
    Registration for bringing goods into the UK from the EU More than £83,000
    Deregistration threshold Less than £81,000
    V.A.T. is not a problem and dont see why you have not faceted the return into your costings...But as said ways and ways so get yourself a good Accountant or as said I can hit you with this guy...