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  • Liquidations

    Hi, Hope everyone is fine. If a seller gets liquidation amount from an online marketplace for liquidating its products (whereas the online marketplace does not show VAT charged on this liquidation), will seller consider that amount to be considered as Income or Compensation? and in any case, will seller pay VAT on it? Thanks,
  • UK VAT Standard - Inventory Reimbursement

    Hi, A UK VAT Registered Company (20% Standard Rate) sells online at Amazon UK, stores its products at Amazon UK warehouse. The seller receives a reimbursement of amount GBP 100 as inventory reimbursement issued by Amazon Europe S.R.L. (registered in Luxembourg Address), due to online marketplace's mistake be either warehouse damage, lost etc. There is NO VAT charged on this invoice and there is reverse charge statement in the invoice. Question 1) Will this reimbursement be considered as Taxable Income? 2) There will be NIL VAT EFFECT as this is under reverse charge method (the supply is not vat exempt)? Thank you
  • UK VAT Standard Rate Entry into Boxes - Reverse Charge for Services from Abroad

    Hi, A UK VAT (standard 20%) registered company receives supply of services in UK from an online marketplace Amazon Services Europe S.à r.l. (Luxembourg) for an amount of GBP 200. The invoice states "This supply is not subject to VAT. It is your liability to account for VAT under the reverse-charge procedure if required by your local VAT regulations." The UK Vat registered business is NOT partially exempt from paying VAT and the products it is selling are normally charged at 20%. Is the following entry of VAT for this particular transaction VAT in the boxes is correct? Box 1 (output tax): £200 x 20% = £40 Box 4 (input tax): same figure as Box 1 (£40). This assumes that the expense in question relates to ‘taxable’ activities and there are no partial exemption. Box 5 (VAT payable): nil effect (no VAT to be paid to HMRC) since Box 1 is the same as Box 4 for this particular transaction. Box 6 (outputs)/Box 7 (inputs): the net figure of £200 is included in both of these boxes (treating the services received as both income and expenditure). Am I Correct? Thank you,
  • VAT registered UK Business Receiving Supply of Services from Outside UK (Europe)

    Hi, A UK VAT registered (20%) is selling non-exempt products (at 20% rate) online and getting invoices from Amazon Luxembourg showing NO VAT and statement related to REVERSE CHARGE (those services are charged at 20% if had been purchased from inside UK). This is surely under reverse charge and that is why, Amazon Luxembourg is not charging VAT. The business is NOT partially exempt from paying VAT. My question is; What will be the net effect of REVERSE Charge on UK Seller's VAT Returns. Will the seller pay NO VAT on these services in its VAT returns OR the seller has to pay 20% VAT on those services? Thank

    Hi, I have two questions. A UK VAT registered seller (FLAT RATE Scheme @ 7.5, first year so it will get discounted rate which is 6.5%). The seller receives supply for an amount of £200 inside the UK from a company which has offices inside UK as well as outside UK, but the invoice once issued contains the address and name of the non-UK firm address. So it falls under Reverse Charge Abroad method. Scenario: Services Amount = £200 VAT = 0% The issuing company mentions on bottom of invoice that “This supply is subject to flat rate scheme and shall be treated according to local tax laws”. Question: Will the seller enter £40 as VAT and £200 as NET in both BOX 1 and BOX 4, so that the total effect of VAT is zero? If so, this means there will be no tax for seller to pay on this Reverse Charge Turnover. Question 2: What final reverse amount will not be considered in the Flat Rate Taxable Turnover? Is it £240 OR £200? Thanks
  • Taxable Revenue - VAT Deadline

    Hi, hope you are doing well. One of my friends established UK company in September 2021 and he started selling at an online marketplace on 20th February 2022. Until 31st August 2022, his total revenue reached almost GBP 85K, exceeding VAT Registration Threshold. During the next 2 months (September and October 2022), his total revenue since February 2022 till October 2022 has reached to total GBP 159K. UK Government VAT Guidelines Link - 4.2 When to apply to register for VAT 4.3 Your registration date 4.4 Working out when to apply to register for VAT — examples 4.6 If you do not tell HMRC at the right time 12.1 If you do not register for VAT at the right time UK Government FLAT RATE SCHEME VAT Guidelines Link - “To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC. ” Based on above guidelines, I would highly appreciate if you can answer my following questions in chronological order; 1) According to 4.2 + 4.3 and 4.4; his revenue exceeded GBP 85K threshold on 31st August 2022, so its effective registration date shall be 01st October 2022? 2) According to 12.1; he did not register for VAT yet, as he does not receive any notice from HMRC. The late penalty will be 5% of the percentage of the net VAT due from 01st October 2022? 3) Since his revenue has already exceeded GBP 150K, can he still register for Flat Rate Scheme or he has to register for Standard Rate? 4) According to 4.6; he did not charge customers any VAT on sales till now as he did not register yet. Will he need to pay VAT amount to HMRC (depending on the scheme he is obliged to apply for) on all that revenue that he has made starting from the 01st October 2022 (the effective registration date) which is approximately GBP 74K? Thank you

    Hi, I have a question. Suppose, we sell at an online marketplace a product at GBP 25. Let's take example customer get GBP 10 discount as follows; 1) Voucher/Coupon GBP 5 discount by Seller 2) Voucher/Coupon GBP 5 discount by Online Marketplace So, the customer pays total GBP 15 for the product. My question is that in above scenario; 1) Will my Taxable Revenue for this product is GBP 15? 2) Does this come under Clause 7.3.2 Discounts (a) Unconditional discounts ( Thank you,
  • RE: VAT Taxable Turnover - Discount by Online Marketplace

    Thank for your time and response. PRODUCT CHARGES: ABC Product: GBP 25 PROMO REBATE Discount by Seller = - GBP 5 Shipping (This is actually the Discount given by Online Marketplace to buyer but shown as SHIPPING) = - GBP 2 OTHER Shipping (This is the amount given by Marketplace to seller to compensate the seller for the discount given by Marketplace as shown above) = GBP 2 Sales Proceeds = GBP 20. My understanding is that my Taxable Revenue for this particular order will be now GBP 20. Am I correct?
  • VAT Taxable Turnover - Discount by Online Marketplace

    Hi, I have one question; Let's suppose, I sell a product at GBP 25 at an online marketplace. There is a discount GBP 5 by me as well as discount GBP 2 by Online Marketplace. So the total discount becomes GBP 10. Since the online marketplace compensates the seller for its discount of GBP 2, the marketplace shows a charge of GBP 2 as Shipping in the order details. Now in my particular order details, the online marketplace shows my sales proceeds as; Product Charges: GBP 25 Discount by Seller = - GBP 5 Discount by Online Marketplace = - GBP 2 Shipping = GBP 2 Sales proceeds= GBP 20 Will you help me if my taxable turnover for this order will be GBP 20 or GBP 22 (including GBP 2 shown as Shipping by Marketplace)? Thank you, Will I consider
  • VAT Taxable Turnover

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