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  • Questions about VAT charges and VAT receipts before VAT Registration Approval

    Dear HMRC colleagues, The VAT application process is normally very long. It takes about one to three months to be approved for VAT registrations. In this case, if the VAT registration threshold has been breached around two months ago, but the VAT application is still under review by HMRC. Under this situation, my question is that what is the rules regarding VAT charges and VAT recipients before formally VAT registered? Thank you very much for your guidance and clarification. Best regards, 
  • Should we apply VAT on Amazon FBA inventory reimbursement?

    Should we apply VAT on Amazon FBA inventory reimbursement? Dear HMRC colleagues, When we sell via Amazon, sometimes, we have income from Amazon as FBA inventory reimbursement. From my understanding, this was not sales made through taxable supply of goods. They were compensation from Amazon on eligible items that are lost or damaged by an Amazon fulfilment centre or a facility operated on behalf of Amazon. Therefore, could you please advice whether we should apply VAT on these FBA inventory reimbursement Incomes (or compensations)? Thanks for help. Best regards, Andrew

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  • RE: clarification on the difference between goods and service supplies “outside of UK VAT Scope"

    Thank you very much for your quick reply. May I have a following up questions? In the case of Supply of goods. If a UK established Business sell goods via Amazon US. Those goods are stored in US and sold to US. The VAT Notice 703 Section2.2 said that “Goods located outside the UK are not exports and the supply is outside the scope of UK VAT” Therefore, should this kind of supply of goods which are outside of the scope of UK VAT be included in the box 6? Thanks again for your help. Best regards, Andrew
  • clarification on the difference between goods and service supplies “outside of UK VAT Scope"

    Dear HMRC colleagues, Could you please help to clarify the difference between goods and service supplies which are “outside scope of UK VAT”? How will it affect Box 6? ================ The VAT guidance is clear: Box 6 has to include total value of sales and all other outputs excluding any VAT. We need to show the total value of all your business sales and other specific outputs but leave out any VAT. Some examples are: • supplies which are outside the scope of UK VAT as described in Place of supply of services (VAT Notice 741A) https://www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012#section3 ============ Does that mean only supply of services, which are outside the scope of UK VAT, could be included in Box 6? However, for supply of goods, which are outside the scope of UK VAT, we should not include them in Box 6? Thank you for your help. Best regards, Andrew
  • As UK drop shipping business, do we need to register VAT?

    Dear HMRC colleagues, Drop shipping is new online trading business model recent years, but I could not find any specific VAT guidance on it. I wonder whether we need to register for UK VAT? On one side, we understand that UK businesses should register VAT once the £85k threshold has been hit; on the other side, we learned that non-UK business must register UK VAT. However, in our situation, we do not have any inventory by ourselves. When orders came on our Amazon accounts, we will let our overseas suppliers to deliver items to our UK customers directly. To give you more context about the drop-shipping online sales model. How we run the drop-shipping business: We are UK citizens and working from home. What we purchase: Our supplier is a UK VAT registered company (who is also acting as a kind of agent), and we have no contact with any overseas goods suppliers. What we sell: Via the portal, we have a range of selected goods. and we then listed those selected goods on our Amazon Account to sell. What we do with those selected and then listed goods: We do not have any inventors, but work as a kind of intermediary, a customer service representative. We deal with Amazon customers but don’t really have anything to do with the products, as they were directly shipped by overseas goods providers to my UK customers. Those overseas goods providers will be in charge all the custom related issues. How the payment transaction works: Amazon pays us regularly for any confirmed orders. We pay our UK supplier regularly for those sold goods (fees paid would cover all the cost of goods), which were initially selected via portal, and then listed and sold via Amazon. Thank you very much for your time and consideration. Best regards, 
  • How do we apply the UK VAT on organising phygital events in Italy?

    Dear HMRC colleagues We will organise an event taking place in March 2023 in Italy. The event will be a phygital event and it will include a concept store/art fair where brands will be able to sell their products and the opportunity to sell online. For the event, we are going to receive money: - in the form of sponsorships from different companies EU based - in the form of fee/payments from brand exhibitors taking part in the event - in the form of payments from clients buying products both online and offline Could you please provide some guidance: Do we need to apply and pay VAT on all the 3 sources of income above? If so, do we apply the UK VAT? Thank you very much for your help. Best regards, Andrew
  • Under FRS, do we record in box 6 for sale amount outside of UK VAT scope?

    Dear HMRC colleagues Could you please clarify that under FRS in box 6, do we put those sale figures which are outside of UK VAT scope? The VAT guidance under Standard VAT rules stated as below: Box 6 total value of sales and all other outputs excluding any VAT Show the total value of all your business sales and other specific outputs but leave out any VAT. Some examples are: • supplies which are outside the scope of UK VAT as described in Place of supply of services (VAT Notice 741A) https://www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012#section3 However, under FRS, it is not clear, please see below: Box 6 total value of sales Enter the turnover that you applied your flat rate percentage to, including VAT. You should also include the value, excluding VAT, of any supplies accounted for outside the Flat Rate Scheme, such as the sale of any capital goods that you’ve reclaimed input VAT on, and reverse charge transactions. Also include any amount you’ve entered in box 8. https://www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012#section4
  • RE: How could I account for reverse charge as UK service supplier?

    Thank you very much! I have a following up question: For B2B services What if my client is UK VAT registered and UK Incorporated company? However, they only have UK virtual office address, no physical address/offices, and the director/business owner is non-UK residence. In this case, as service provider, do we need to charge VAT on them? Thanks again for your clarification?
  • How could I account for reverse charge as UK service supplier?

    Dear HMRC colleagues, We just set up a business consultancy services, and our clients are non-UK companies and individuals. Could I know how the reverse charge works in these situations? Example one: B2B From my understanding, for B2B supply of service, we will not charge VAT for non-UK companies. Say, we charged the service fee of £1000 on a US company. I need to specify in my sales invoice that Reverse Charge Applied. How could we account the £1000 in my VAT returns? Is it just going to Box 6 for the £1000 Example Two: B2C For B2C supply of service, should we charge VAT on the service we provide to non-UK individuals? Say, we charged the service fee of £1000 on a US businessperson. Do I need to specify anything in our service invoice? How should I account for the £1000 service fee in our VAT returns for supplying service to non-UK individuals? Thank you very much for your help. Best regards, Andrew
  • Do we need to apply VAT on delivery cost? How about 0 rated goods?

    Dear HMRC colleagues, I understand that we need to apply VAT on the goods we sold, could you please confirm whether we need to apply VAT on the delivery cost, gift wrap etc? Also, if the good are 0 VAT rated goods, do we need to apply any VAT on the delivery cost, gift wrap etc? Thanks for help. Best regards, Andrew