uk-netmarketing Archive (2011-2015)

Hi 

There's a lot of "if's, then's & maybe's" here because it depends on what service you provide, where the service is used and where the customer is based. To be honest, this isn't the place for tax advice and it's far wiser to ask an accountant because, if I advise you wrongly, you're screwed and have no comeback.

But what I will say is this:

VAT Registration:
First, go for Flat Rate VAT. It will make your life much easier and, if you're charging VAT but not buying very much, you'll come out a few quid up. You can only do this if your turnover is small enough but it served us well for the year or so of business.

Accounting Software:
We use hosted services for everything including our accounts. We use Xero for our accounts which costs £20 per month (for our package) and does everything we need from importing statements to tax reports & issuing & reconciling invoices. 

Charging VAT - seek proper advice.
I uploaded the digram we use to calculate VAT for international clients here as a guide: http://www.thboom.net/downloads/VATrules.pdf

The rules are fiddly and there's the "place of supply of services" or “effective use and enjoyment” to consider but generally speaking, you charge VAT as a service provider as follows:
 
·         If the customer belongs in the UK, then UK VAT is charged.

·         If the customer is part of another EC member state, then there are different rules based on whether the customer is a business or not as follows :-
 
o   In business – no UK VAT is charged
o   Not in business – UK VAT is charged.
 
However, as you are a supplier of electronically supplied services, we also have to take into consideration the “effective use and enjoyment” of your service. If the use of your service is in the UK, then UK VAT must always be charged.

http://www.hmrc.gov.uk/vat/managing/international/exports/services.htm

You need to check if the "place of supply of services" for you means always charging VAT regardless of where the customer might be based. Again, check with an accountant.

Hope that helps

Al





		Alec East Director
		 
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On 27 Mar 2014, at 12:00, uk-netmarketing-request at mm.chinwag.com wrote:

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> Today's Topics:
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>   1. VAT questions (Caroline)
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> ----------------------------------------------------------------------
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> Message: 1
> Date: Tue, 25 Mar 2014 08:04:17 +0000
> From: Caroline <caroline at radarmusicvideos.com>
> To: uk-netmarketing <uk-netmarketing at mm.chinwag.com>
> Subject: [uk-netmarketing] VAT questions
> Message-ID:
> 	<8E353470-2E08-422C-B20A-02E30BBF6EE1 at radarmusicvideos.com>
> Content-Type: text/plain; charset="us-ascii"
> 
> Hello Chinwaggers,
> 
> We're beginning to get close to the VAT threshold, so we're having to consider thorny issues of pricing.
> But there are other questions too, you might have some advice to share?
> 
> Book-keeping
> I currently run our book-keeping on Google Docs. Now might be a good time to swap to something like Quickbooks.
> Any suggestions on accounting software, preferably free software?
> 
> Rules
> When should we apply VAT and when shouldn't we? Our accountant has advised the preferred rules are to apply VAT only to sales to UK residents, but that HMRC sometimes take a different view and to check. I guess the budget announcement makes this preference law? viz:
> 
> ""As announced at budget 2013, the government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue."
> 
> Any advice from anyone on how to easily spot where your blumming customers live? We use Paypal & Paypoint.
> 
> 
> 
> 
> Any other words of wisdom on the headaches & otherwise of becoming a fully fledged VAT registered company
> 
> Many thanks all, as ever :)
> 
> Caroline
> 
> 
> 
> 
> Caroline Bottomley
> 
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