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Disclosed agent can be viewed as two separate transactions though you may be collecting the money and passing it to the principal. Ie you charge £20 plus VAT £4 and the principal charges £80 (exempt) = total £104; and you pass the £80 to the principal. You pay £4 to the VAT man.
The service you provide involves three parties (principal, agent or customer) and hence you need to have robust agreements that make it clear to the client that you are an agent (disclosed agent) and in that case you only charge VAT on the £20 commission and the £80 is exempt. If not disclosed to the client, then you will be acting as principal, and VAT on the £120 is chargeable.
The other argument you can make is whether what you are providing is directly linked to the provision of dental services – depending on what you exactly provide!. However, per AXA Denplan VAT case, where AXA Denplan was merely arranging payments between dental customers and dentists argued their services were an exempt supply of payment or transfer services but rather the courts ruled that it was a standard-rated administrative service.
Apologies, I have just seen your post and I’m one of the administrators and tax advisors. I have just dropped you an email.
If you are dropshipping from Canada into the Netherlands, then the place of supply is considered to be where the goods are shipped from, rather than where they arrive. In this case, as the place of supply is outside of the EU, this means VAT is not due on the sale of the goods.
However, just because there is no VAT due on the sale, it does not mean that VAT should be ignored altogether. There may be import VAT due when you ship goods into the Netherlands/UK. Import duties and VAT is payable by the importer on record.
If you are dropshipping and your customer is the importer on record then technically the customer is responsible for the import VAT. If your business is the importer on record then your business will be liable to pay the import duties and VAT.
Hope this helps.
if you had a refund then the VAT control account should have had a debit opening balance. On receipt of the cash Dr Cash and Cr VAT control acount.
You can register for VAT voluntarily and you become a ‘repayment trader’, that is, its output tax is regularly less than input tax because the business mainly has zero-rated sales and you can also HMRC for the monthly return option so that the refunds come to you monthly. The VAT refund/payment is the difference between output and input tax. So in your example above, output tax will be zero and input tax £1.50, hence a net refund of £1.50.
Hope this helps.
There are quite a number of accounting softwares but my personal preference for your industry is https://www.clearbooks.co.uk/construction-industry-scheme/
Yes, VAT registration is now mandatory for exporting goods < £135 to UK buyers. see link here, hope it helps: https://www.dpd.com/hr/wp-content/uploads/sites/256/2020/11/CHR-Cluster-VAT-registration-for-exporting-good-under-135-pounds.pdf
Hi Gary,
It is not clear what exactly you provide through the UK agency?
1 month spent at home – are you working when at home?
Regards
Vincent
The printed books are zero-rated which is different from being exempt, and zero-rated supplies are taxable supplies and will count towards the registration threshold should you be required to register for VAT in the UK.
In my view, without going into detail, its your customers that should be aware that they may have to pay UK import VAT on the goods when they arrive in the UK. They may also have to pay duty too. But since these are printed books there would not be any import VAT unless the books do not meet the zero-rating criteriio as explained here: https://www.gov.uk/guidance/zero-rating-books-and-printed-matter-for-vat-notice-70110
Although the outcome of Brexit is still uncertain, Netherlands imports are mostly likely to be treated as any other non-EU import and hence you may want to read more about this here:
https://www.gov.uk/guidance/vat-overseas-businesses-using-an-online-marketplace-to-sell-goods-in-the-ukThis sounds like a complex transaction that requires a detailed review.
The first consideration is to ascertain what services you provide – are you an agent or principal in this transaction since you are simply passing the supplier products? A detailed review of the agreements/ arrangements is required. If agent then VAT is charged on your agency fees and the supplier is responsible for the VAT to customers.
The second consideration is to assess the scope of these virtual host services which can either be normal service, e-service or electronically supplied service etc for VAT purposes. And whether these virtual services are provided with or without human intervention.
Live interactive online services are considered an ‘entertainment activity’ or ‘amusement activity’, which must be considered to be ‘materially’ or ‘actually’ take place where the service provider has established his seat of business or a permanent establishment from which he provides the service or, failing that, his place of residence or his usual place of residence – for VAT purposes.
If the services are electronically supplied service, then the place of supply is where the customer is located, the host might have to register for VAT purposes in a different Member State.
Hence it is quite a complex case that requires more information to address the key issues.
Yes, HMRC has published a policy paper entitled “Accounting for VAT on services between the UK and EU member states from 1 January 2021”. The paper confirms that, from 1 January 2021 following the end of the transition period with the EU, the VAT rules applying for supplying services between the UK and EU member states will become the same as the current rules for supplying services from the UK to outside the EU, hence import VAT will be charged (if there is no BREXIT deal).
You may find this article helpful esp relating to deferring import VAT/duties and getting an EORI number, etc https://www.sage.com/en-gb/blog/customs-and-vat-after-brexit/#importing-anchor-link
As of 1 January 2021, UK businesses have to consider imports and exports to and from European Union (EU) countries as they do for countries outside the EU – outside the scope of UK VAT.
not sure what you are selling and if the buyers are UK or none UK ferries. You may need specialist advice.
its a tricky one…but you can raise this up with HMRC if you are not happy with your caravan park owner on HMRC at [email protected].
