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Posted Wed, 14 Jun 2023 12:16:28 GMT by MrJackT14
Hello! I am thinking about starting a print-on-demand business. This will either be with Gelato or Printful. The way it works is that I simply create a design, and then put that design on merchandise. The print-on-demand company then handles all of the orders. They create the products, they then ship the products to the customers and they also handle the customer service. I would then be paid any profit from the sale. When I start this business do I need to register as a sole trader? And, it’s to my understanding that I would NOT need to register for VAT? And, would I need to do a self assessment every year even if I haven’t made over £1000? If the print-on-demand company puts VAT or Tax onto the customers orders would I need to do anything? (As I assume that would be billed to the print-on-demand company?) My products would only be available to customers in the UK, USA and Europe. The companies have productions hubs in various countries such as the UK, Europa and USA. The company says “in most cases products are fulfilled at the closest production centre” I just want some advice on all of this please. Please don’t sent links, as I have read many links and I still don’t understand. So please explain the answers to my questions in detail. Thanks
Posted Fri, 16 Jun 2023 08:16:30 GMT by HMRC Admin 5

Yes you will need to register for self assessment.

VAT is required if your turnover is over £85,000. As you are only paid the profit, the tax that is imposed by the companies doesn't affect you.

Thank you
Posted Fri, 16 Jun 2023 08:48:13 GMT by MrJackT14
Hello! Thank you very much for your reply. So, if I was to make the products available in Europe, do I need to do anything? As I mentioned before, the print-on-demand company handles the production and shipping. And, they have production hubs in the UK, Europe and the USA. Or, do I simply just create the designs, then upload the designs onto the merchandise and then as the print-on-demand company handles all the production and shipping, I just then have the keep records of my earnings and then sub a self assessment once I earn over the £1000? Many Thanks
Posted Wed, 21 Jun 2023 11:47:36 GMT by HMRC Admin 19

As you are resident in the UK and your self employment business is in the UK, you would report the worldwide turnover from the business as the gross profit. From this you can then deduct your expenses.  

If you pay any foreign tax on the foreign side of your business, you will also need to declare this part in the foreign section, so that you can claim tax releif for foreign tax paid.

Thank you.

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