Firstly your supplies fit squares on the digital services – see list here: https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers#define-digital
However in your case, it seems this para is applicable “Unless you sell digital services entirely through digital platforms or marketplaces, who take on responsibility for accounting for the VAT due, you must consider how you intend to account for VAT on supplies of digital services to consumers”, in which case you don’t need to worry about VAT registration.
It might be worth asking the platform providers on who takes on responsibility for accounting for the VAT due.
Hope this helps.
Hi, many thanks for the reply.
Yes, I thought I should be ok with that.
However, one of the US based platforms I sell via replied with this when asked if they are taking on the VAT responsibility:
“No, we currently do not pay VAT. But we are working on implementing it into the site, but it is a slow and expensive process and will require legal advice before we can go ahead.
We cant provide tax advice, but also we don’t have much info on this.
As soon as we find out more and get a better understanding we will make announcements to our EU based stores.”
Firstly it sounds like they have no knowledge about this VAT law to EU consumers (hence their statement of making announcements to EU based stores! It affects worldwide providers of digital content to EU based customers, not just EU based stores).
I am still waiting on some other platforms I sell via to get back to me – lets see what they come back with.
So my next question is…. what happens in my case if they all say they do not take on the VAT responsiblity? Surely I am not liable? Afterall, these platforms take 40% commission, leaving me with 60%, of which I pay income tax and National Insurance on. Would I have to tell HMRC where I am selling via? Basically getting them in trouble?
And one last question is, what happens for me, if I reach £85,000 VAT threshold? Will I then have to register for VAT even though my type of earnings are exempt from VAT as I sell via digital marketplaces?
What would I do, just zero the VAT then explain why?
Ugh, any advice would be appreciated.
Many thanks in advance.