The Wholesale Forums

[Xanxicar]

hello there,

I have some questions regarding VAT so i would appreciate if you could plz answer them . thx

scenario 1
1. Lets say Im vat registered, and i decide to buy item from my supplier whos based outside eu but since item is expensive i dont wanna stock it, i list it on my website/ebay and the item sells and i Charge my customer VAT then i order the item from my supplier , i then recieve the item couple of days later and i pay the vat to the courier guy and ship the item to my customer next day. so is it ok charge vat when the item is not in your physical possesion but u expect to get it couple of days later?.


Scenario 2

2. Im vat registered and im using a dropshipper whos based outside of EU and he ships worldwide, i decide to sell the item on ebay uk and item sells , i then send the money to my supplier and he sends the item direct to my customer and my customer pays the vat/duty upon recieving the item. so can you do this ?


Scenario 3

3. Im not vat registerd but im using a dropshipper based outside of eu and im selling the items to customers outside of eu(lets say NA and Australia)and i reach the turnover limit of 60000, will i have to register for VAT?

Scenario 4

4. Im vat registerd and doing the above(in scenario 3) so will i have to list all the items that i sold in my vat return?


regards

[amazingfinance]

Question 1 - You reclaim the vat back since you are paying it to the courier and charging the customer. You only pay vat once to the government, so if you pay it when it comes in, and when you charge the customer, you only end up paying the government the difference. I.E say you made £10 profit, you would pay 17.5% to the government on your next vat return.

2. Your customer is already paying the vat to yourself on your ebay/item as your price needs to be either + vat or ex vat. Dont fully no the answer to this one, sorry.

3. Yes

4. Only the UK ones i would think.


Hope this is accurate and helpful, contact customs and excise, they do have an advise number,

[greedyboy]

Originally Posted by Xanxicar

scenario 1
1. Lets say Im vat registered, and i decide to buy item from my supplier whos based outside eu but since item is expensive i dont wanna stock it, i list it on my website/ebay and the item sells and i Charge my customer VAT then i order the item from my supplier , i then recieve the item couple of days later and i pay the vat to the courier guy and ship the item to my customer next day. so is it ok charge vat when the item is not in your physical possesion but u expect to get it couple of days later?.

The item is classed as a 'Special Order' item.

You import the item, pay the VAT and costs and sell it as normal plus VAT.

Scenario 2

2. Im vat registered and im using a dropshipper whos based outside of EU and he ships worldwide, i decide to sell the item on ebay uk and item sells , i then send the money to my supplier and he sends the item direct to my customer and my customer pays the vat/duty upon recieving the item. so can you do this ?

Yes but you have to explain the liabilities your customer is subject to such as VAT/Duty.

However, proper importing and accounting proceedures really expect you to import the item and then export the item. There are specific VAT/Duty schemes for such transactions.

The other complication is the Comercial Invoice will be issued by your supplier and not you. Therefore technically the receipient will pay taxes/costs on your suppliers price and not your price.

To be honest the VAT man is clamping down on these transactions so my first suggestion is the most appropriate suggestion. Especially with so much VAT fraud associated with international transactions.

Scenario 3

3. Im not vat registerd but im using a dropshipper based outside of eu and im selling the items to customers outside of eu(lets say NA and Australia)and i reach the turnover limit of 60000, will i have to register for VAT?

Yes if it falls within any 12 months of trading.

Scenario 4

4. Im vat registerd and doing the above(in scenario 3) so will i have to list all the items that i sold in my vat return?

No. You list the amounts of VAT you are reclaiming and all your sales VAT (the amount on your invoices).

All your transaction will be listed on your sales receipts/invoices if the VAT man ever wants to inspect your transactions.