online selling VAT question

Halo Admin, I have several questions to ask: Question 1: ---------------------- I am located in the UK, and I am a sole trader. I have an Etsy shop which sell personal-made art pieces to oversea like USA or Europe (except UK). As a UK seller selling goods located in the UK to foriegn customers, https://www.gov.uk/guidance/vat-overseas-businesses-using-an-online-marketplace-to-sell-goods-in-the-uk I would like to have a clarification that i don't need to registered VAT for my business, am I correct? Question 2: ---------------------- I am located in the UK, and I am a sole trader. I have an Etsy shop which sell my personal-made art pieces to both UK and oversea, but my VAT turnover is far less than £85,000 each year, and each price of the B2C goods is less than 135GBP (excluding VAT) . In this case, I don't need to registered VAT for my business, am I correct? thanks

Hi,

If you are located in the UK then you will only need to register for VAT if your turnover os over £85K.

Who should register for VAT (VAT Notice 700/1)

If you are exporting goods to the EU or beyond, then these will be zero rated exports and even if you breach the threshold you can apply for exemption from VAT registration.

Who should register for VAT (VAT Notice 700/1)

If you sell goods to both the UK and overseas, then you would need to calculate the combined turnover of these supplies and you could look at applying for exemption from registration if the majority of your sales are zero rated exports.

However if you are exporting goods of a value below £135 to consumers in the EU then there is an IOSS system in the EU which allows you to pay the import VAT of any EU member state you are exporting to on one IOSS return.

EU VAT e-commerce package
VAT on e-Commerce - One Stop Shop

Thank you.

Hi Admin, thanks for your reply. May I have clarifications that 1) That's mean if I am located in the UK and I sell goods locally (in UK), and my total turn over is below £85K, i don't need to register for VAT? As I saw some posts in the Internet saying that some online marketplace asked them to register the VAT because of the goods locating in the UK even though they didnt exceed the £85K threhold. Or is it just for the oversea sellers' good already in the UK warehouse? I feel a bit confused about that. 2) if i am located in the UK, and I sell good to oversea (exclude UK and EU), if my total turn over is below £85K, i dont need to apply for exemption from VAT registeration right? 3) if i am located in the UK, and i sell good to oversea (exclude UK but to EU), and the value of each item is over £135, the customer will be responsibile for the import VAT and so i dont need to apply for the IOSS for the import VAT right? 4) if i am located in the UK, and sell goods to EU. As I am selling through OMP like Etsy, if i didnt apply for IOSS and each goods is under £135, the OMP is liable for charging the EU VAT on sales as I am not a VAT registered company, and the OMP is liable for declaring that VAT on their own IOSS VAT return right?  thanks

Hi
Yes all these point are correct.
If you belong in the UK and you sell goods under the VAT threshold then you are not required to register for VAT.
This would be the situation if you were based overseas as there is no Registration threshold for oversees businesses.
Thank you.

Please I am already registered and have utr under construction scheme now I want to own an online business on amazon . Please I need letter for Vat exemption . Also want to know if I can continue with the utr I have or get a new one

Hi As posted by another respected member, the OMP is liable if each good we (UK resident company) are selling to individual customer in EU is under £135. Why OMP says that you need to register for VAT in each EU country if you breached VAT registration threshold of that specific country? In my client's scenario, he is running business under Company registered in England & Whales, he will be importing goods directly in EU member states, and then he will sell from OMP. Does he need to register with each individual EU country, or the zero rate rule applies as he is running business under UK Company? Also, if he imports goods in UK first and then exports it to EU will that make any difference to VAT registration requirements in EU countries? Regards

Hi,
Please see the guide below which explains the procedures in place for selling goods below a value of £135 to individuals in the EU via an OMP.
EU VAT e-commerce package
If the goods originate in the EU and come in to the UK first then this won't change the procedure for exporting the goods to the EU.
The liability of the goods being exported is Zero rated in the UK as they are being exported.However the VAT will shift to the country where they are being exported to as the guidance explains.
Thank you.

Thank you for your reply. Would you please guide if my company is registered in UK, but I imported directly from 3rd country into EU OMP store and then sell individual items to customers of below £135. Will it still be considered as if I have exported from UK as the company which is importing goods in EU is registered in UK. or the goods should first land in UK in order to qualify for zero rated exports? and also, will it change anything as you mentioned, we won't have to pay VAT here but will have to see VAT guidelines of the country where we have imported goods to sell via OMP? Kind regards

Hi VAT is country specific so you need to understand requirements and rates applicable in each country where you trade. The EU does have common rules. The EU has specific threshold rules for companies based within the EU but non EU companies have a zero threshold to register for VAT. As you have mentioned there are also special rules for trade via a OMC . If goods go directly to an EU country from outside the EU ( including from the UK) then that country’s import VAT will apply. No VAT would be applicable in the UK as the goods are never physically in the UK. It is the act of exporting goods physically from the UK that would allow you to charge VAT at zero rate on the export movement. HMRC cannot provide advice on other countries requirements.

Hi,

If the goods are being imported from a third country into the EU, then these will be outside the scope of VAT as the goods are never in the UK.

You can find guidance on importing goods below a value of £135 in to the EU from a third country here:

VAT Import One Stop Shop Scheme

Thank you.

Hello. I have the same question but my situation is a bit different. My company is based in Uk and we sell handmade products to USA only on Etsy. To optimise cost, we hire a factory in Vietnam to produce products and they ship them directly to the customers in the USA. Can you please advise if we need to register VAT in the UK? Thank you very much.

Hi Phat Le,
There is only a requirement to register for VAT in the UK if you are making taxable supplies in the UK
As the goods you sell never enter the UK then the supplies are Outside The Scope of VAT and therefore there would be no requirement to register for VAT in the UK.
Please see the guidance below:
2. Basic principles
Thank you.