Lets discuss VAT

[JT]

OK lets get this hot topic going.

Im VAT registered along I guess with maybe 1/2 the webmasters here.

On the basis that two different accountants will tell you two different things about a VAT issue and indeed two different VAT inspectors will tell you two different things about a VAT issue

Who charges VAT on there UK and European customers to their pay sites? Who believes that they dont have to? and why do you think you should and shouldnt

Im bringing this up because I have recently changed my accountant to find one that agrees with me and recently spoke to a good program I use who believe they should charge VAT after speaking to the VAT man

Lets discuss people

[Rosie]

Our accountant told us that as we use CCBill as a processor we wouldn't have to pay VAT on sales. Her reasonning behind this is that technically we're paid by CCBill for providing a service that they in effect resell to our members. As CCBill are an American company, money they send us is zero rated for VAT. I've no reason to disbelieve her, unless I find myself in prison for VAT avoidance in the near future ;)

[Shandy McAndy]

Our accountant told us that as we use CCBill as a processor we wouldn't have to pay VAT on sales. Her reasonning behind this is that technically we're paid by CCBill for providing a service that they in effect resell to our members. As CCBill are an American company, money they send us is zero rated for VAT. I've no reason to disbelieve her, unless I find myself in prison for VAT avoidance in the near future ;)

maybe we have the same accountant, maybe we can share the same cell if they are wrong :mad:

[uk_dude]

lol... my accountant told me that if i was going to reach the vat threshold to take a break :D

[mellenig]

Our accountant told us that as we use CCBill as a processor we wouldn't have to pay VAT on sales. Her reasonning behind this is that technically we're paid by CCBill for providing a service that they in effect resell to our members. As CCBill are an American company, money they send us is zero rated for VAT. I've no reason to disbelieve her, unless I find myself in prison for VAT avoidance in the near future ;)

My accountant told me the exact same thing he even spoke to our local offices and was told the same thing there...maybe a few of us in the same cell.

[mellenig]

The majority of my income comes from AVS and sponsor programs rather than my own paysites which is classed as zero rated. I think if the bulk of my income came from my own paysites I would have a rethink.

I have been asking my accountant the same question since the whole euro vat came into play and have been getting the same answer that I don't need to register.

I must admit though the whole issue does concern me and has done since it became law.

Thanks for that.... know I won't sleep tonight Ill have the VAT issue running through my brain :ugly:

[domtheboy]

LOL, I dream of earning the amounts that would necessitate an accountant :)

[domd]

I always make sure i am under the vat threshold.

The vat man is a complete bastard and ive no intention of ever having his beady eyes on my business!

domd
xx

[Mattyboy]

Its all to do with "point of sale". If you are a UK buiness, you must pay pay VAT on all joins from the UK if you are VAT registered. The VAT inspector told me that to my face :mad:

[JT]

Its all to do with "point of sale". If you are a UK buiness, you must pay pay VAT on all joins from the UK if you are VAT registered. The VAT inspector told me that to my face :mad:

But if you speak to two different VAT people, they will tell you two different things. Not just on this but on anything, just like accountants will.

I agree if the point of sale two your customer is the UK then you should pay VAT, but as I understand it, from my accountant, who has won this argument with the VAT on two occaisions, being as though CCBill is a third party biller, you are supplying CCBill with the site, so in fact CCBill are your customer so your point of sale is the U.S and your customer is CCBill, if CCBill are supplying your site to their customer in the UK that makes no difference to you. I may not be explaining that 100% correct but that is the general gist of it.

[Mattyboy]

Thats pretty much what i told the VAT man. His case was, you are a UK company and you are selling your product to UK customers. The billing company has nothing to do with it as they own nothing of your site - they simply act as a 3rd party biller for you. You are a UK business and therefore you must pay VAT on all UK transactions.

[Mattyboy]

VAT Treatment

In line with international agreements supplies of digitised products are "not goods" in respect of customs duties and VAT.

For VAT and duty purposes, all supplies of digitised products are treated as services. This means that customs duties are not chargeable in the EC.
Where do I account for VAT on electronically supplied services including digitised products?

As with all supplies, it is the nature of what is being provided that determines the treatment for VAT. If you are in any doubt about the true nature or content of what is being supplied after reading these sections- see part 4 below.

Under the rules in force until 1 July 2003, most electronically supplied services, including digitised products, and all radio and TV broadcasting services, were subject to VAT in the country where the supplier belongs. That meant UK businesses were required to charge UK VAT on those services to all their customers, irrespective of their customer’s location. Similarly, businesses in other Member States were required to charge VAT at their local rate. However, non-EU businesses were not required to charge EU VAT on supplies to EU customers.
The changes

With effect from 1 July 2003, the place of supply of electronically supplied services and radio and TV broadcasting services is normally in the country where the customer belongs subject, in certain circumstances, to where the services are effectively used and enjoyed.
Who is affected by these changes?

You will only be affected by these changes if you supply electronically supplied services or broadcasting services to, or receive them from, other countries whether EU or non-EU.
Making supplies of electronically supplied services

If you are a UK business:
Supplies to UK customers, business or private:

You account for UK VAT. The place of taxation is the country where you belong.

Example:

A UK business supplies "off- the-shelf" software to a UK private consumer. This is subject to VAT in the UK at the standard rate.
Supplies to a business customer in another EC country, registered for VAT and receiving the services for business purposes:

Your services are treated as being supplied in the EC country where your customer belongs. Your customer accounts for any VAT due in that Member State.

Example:

A UK business supplies a digitised technical publication to a VAT registered business in Germany. The place of taxation is Germany and the customer will account for any VAT due. The UK supplier should not charge UK VAT.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_CL_001173&propertyType=document

[JT]

LOL, I dream of earning the amounts that would necessitate an accountant :)

It happens to us all in the end dude :(

[Rosie]

My accountant told me the exact same thing he even spoke to our local offices and was told the same thing there...maybe a few of us in the same cell.


My only response to that today is: Ewww... sweaty :drink:

[JT]

VAT Treatment

In line with international agreements supplies of digitised products are "not goods" in respect of customs duties and VAT.

For VAT and duty purposes, all supplies of digitised products are treated as services. This means that customs duties are not chargeable in the EC.
Where do I account for VAT on electronically supplied services including digitised products?

As with all supplies, it is the nature of what is being provided that determines the treatment for VAT. If you are in any doubt about the true nature or content of what is being supplied after reading these sections- see part 4 below.

Under the rules in force until 1 July 2003, most electronically supplied services, including digitised products, and all radio and TV broadcasting services, were subject to VAT in the country where the supplier belongs. That meant UK businesses were required to charge UK VAT on those services to all their customers, irrespective of their customer’s location. Similarly, businesses in other Member States were required to charge VAT at their local rate. However, non-EU businesses were not required to charge EU VAT on supplies to EU customers.
The changes

With effect from 1 July 2003, the place of supply of electronically supplied services and radio and TV broadcasting services is normally in the country where the customer belongs subject, in certain circumstances, to where the services are effectively used and enjoyed.
Who is affected by these changes?

You will only be affected by these changes if you supply electronically supplied services or broadcasting services to, or receive them from, other countries whether EU or non-EU.
Making supplies of electronically supplied services

If you are a UK business:
Supplies to UK customers, business or private:

You account for UK VAT. The place of taxation is the country where you belong.

Example:

A UK business supplies "off- the-shelf" software to a UK private consumer. This is subject to VAT in the UK at the standard rate.
Supplies to a business customer in another EC country, registered for VAT and receiving the services for business purposes:

Your services are treated as being supplied in the EC country where your customer belongs. Your customer accounts for any VAT due in that Member State.

Example:

A UK business supplies a digitised technical publication to a VAT registered business in Germany. The place of taxation is Germany and the customer will account for any VAT due. The UK supplier should not charge UK VAT.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_CL_001173&propertyType=document

That is certainly the case. But the way I understand it is that you are not supplying the end user the service or product, you are supplying CCBill, thats why you dont need your own merchant account, you are not billing anyone. You are in fact billing CCBill, who are out of the EU and so you dont need to charge them VAT. If you had your own merchant account and wasnt supplying your site to CCBill then you would need to charge VAT