5 replies to this topic

[BRWG]

Hi guys,

i am based in the UK and am still in the stage of setting up my store, but i want to get everything planned and any possible problems fixed so that it runs smoothly on launch and afterwards.

i've been in contact with the Hmrc a fair bit (pity it takes them 7-10 days to respond to emails, and they keep passing you department to department on the phone) but ive got most of the information i need.

However, with the CN22 form, i have 4 options:

Gift
Commercial sample
Documents
Other


As a business, selling and shipping my products to individuals, what box should i be ticking?

is there also likely to be a huge tax i am unaware of when it gets to their country?

Thankyou for your time

Karl

BRWG

[Vger]

Quote

As a business, selling and shipping my products to individuals, what box should i be ticking?

Sounds like none of the above.

In osCommerce you need to set up an EU Tax Zone (all 27 countries), along with VAT at 17.5% (the UK Rate), and anyone in the EU buying from you pays the VAT. Anyone buying from you who lives outside of the EU does not pay VAT, but you put a note on your site that they are liable for any import duties or tax for which they may be liable in their country.

Don't forget that residents of the Channel Islands, whilst part of the UK, do not pay VAT - so you need to set up the 6 inhabited Channel Islands as "United Kingdom (Channel Islands)" with a fake 2 and 3 letter ISO code not used by any other country, and then remove the few Channel Islands that are included amongst UK Zones (Counties).

Of course, all of this is academic until your turnover exceeds the level at which you have to register for VAT (around the £65,000 a year mark). You'd be crazy to register for VAT unless you have to do so. And when you do have to register for VAT then you'll need an accountant. You wouldn't want to face a random HMRC VAT Inspection unless an accountant has been handling your VAT for you.

Vger

[BRWG]

Vger, on May 4 2008, 11:02 PM, said:

Sounds like none of the above.

In osCommerce you need to set up an EU Tax Zone (all 27 countries), along with VAT at 17.5% (the UK Rate), and anyone in the EU buying from you pays the VAT. Anyone buying from you who lives outside of the EU does not pay VAT, but you put a note on your site that they are liable for any import duties or tax for which they may be liable in their country.

Don't forget that residents of the Channel Islands, whilst part of the UK, do not pay VAT - so you need to set up the 6 inhabited Channel Islands as "United Kingdom (Channel Islands)" with a fake 2 and 3 letter ISO code not used by any other country, and then remove the few Channel Islands that are included amongst UK Zones (Counties).

Of course, all of this is academic until your turnover exceeds the level at which you have to register for VAT (around the £65,000 a year mark). You'd be crazy to register for VAT unless you have to do so. And when you do have to register for VAT then you'll need an accountant. You wouldn't want to face a random HMRC VAT Inspection unless an accountant has been handling your VAT for you.

Vger

Thanks for the help Vger, that was more informative and easier to understand than both times ive emailed HMRC for advice, and the time ive phoned them.

just a quick question: if i am not registered to charge VAT, can i still claim it back if my suppliers charge me it?

[geoffreywalton]

No, wish I could on my weekly shopping.

[BRWG]

geoffreywalton, on May 5 2008, 10:15 AM, said:

No, wish I could on my weekly shopping.

Would be good, i agree, but weekly shopping isnt exactly business use.

what is the point of getting a Vat receipt for fuel etc if you cant claim it back? i know a couple of people who arent registered for VAT, but still get the vat receipts for their fuel.

[porpoise1954]

Vger, on May 4 2008, 11:02 PM, said:

Don't forget that residents of the Channel Islands, whilst part of the UK, do not pay VAT - so you need to set up the 6 inhabited Channel Islands as "United Kingdom (Channel Islands)" with a fake 2 and 3 letter ISO code not used by any other country, and then remove the few Channel Islands that are included amongst UK Zones (Counties).

Vger

Sorry Vger but you are incorrect with regard to the Channel Islands status.

The Channel Islands are not part of the UK (nor the EU) and they have their own international ISO country codes: JE/JER (Jersey) & GG/GGY (Guernsey). The other islands (Alderney, Sark, Herm, etc.) come under the Bailliwick of Guernsey - GG/GGY.

You can find information regarding the special status of the Channel Islands here