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Hello,

 

I currently operate using a UK Limited company that is registered for VAT. When dealing with UK based libraries like Alamy, I receive 20% VAT which I pay to HMRC quarterly. That part is clear.

 

Things get confusing when working internationally. I have joined libraries and POD sites that are not UK based. For example USA, Spain and Australia. 

 

I thought I didn't have to worry about VAT for these, but when I asked my accountant for confirmation, he sent back a rather confusing response, saying the rules are complex regarding digital services and suggested I contact each library/pod site for advice. 

 

Does anyone have an understanding for this area? 

 

Thanks

 

Andy

 

Edited by andremichel
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It's a bit of a minefield. If you're dealing with agencies in the EU, then until March 29th at least you need to account for VAT just as you would in the UK. However, many European companies operate reverse-charge VAT where they supply the goods VAT-free and you have to pay the VAT to HMRC yourself at UK rates and then claim it back again at the same time. Also many companies outside the EU have EU-based subsidiaries which handle their European business and therefore charge VAT. So although I can't answer your question directly, I would think your accountant is right. I would recommend reading as much info provided by HMRC as you can. And then be prepared to ditch it all and start again in a month's time :(

 

Alan

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Call me dumb but isn't that the accountant's job to sort that stuff out for you?  So you know who you have to pay how much and what you can and cannot claim?  (yes I am in that wonderful grouping of not having to worry about tax as I have not earned enough lol)

 

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15 minutes ago, Starsphinx said:

Call me dumb but isn't that the accountant's job to sort that stuff out for you?  So you know who you have to pay how much and what you can and cannot claim?  (yes I am in that wonderful grouping of not having to worry about tax as I have not earned enough lol)

 

If you are running a business and not just engaging in a hobby, you should register as self employed, even if you epexct to make a loss. There are tax advantages, after all....

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I asked the best known POS site about VAT, and they said I didn't need to worry about it, as they don't charge it. I don't know how they get off with that, even though they're based in the US.

NB: That was an official answer, not a peer/forum answer.

 

Edited by Cryptoprocta
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35 minutes ago, Cryptoprocta said:

I asked the best known POS site about VAT, and they said I didn't need to worry about it, as they don't charge it. I don't know how they get off with that, even though they're based in the US.

NB: That was an official answer, not a peer/forum answer.

 

Maybe because the US doesn't have VAT?. State sales tax usually doesn't have to be paid on out-of-state sales.

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49 minutes ago, Sally said:

If you are running a business and not just engaging in a hobby, you should register as self employed, even if you epexct to make a loss. There are tax advantages, after all....

1 hour ago, Starsphinx said:

Call me dumb but isn't that the accountant's job to sort that stuff out for you?  So you know who you have to pay how much and what you can and cannot claim?  (yes I am in that wonderful grouping of not having to worry about tax as I have not earned enough lol)

 

Do yourself a favour and register now. It's compulsory and you can be fined for failing to do it, whether you owe tax or not. To avoid a fine now you may have to explain why you didn't do it straight away, before you started trading.

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5 hours ago, spacecadet said:

Maybe because the US doesn't have VAT?. State sales tax usually doesn't have to be paid on out-of-state sales.

The US based stock companies charge VAT to people living in the EU.

https://build.export.gov/europeanunion/marketresearch/sellingusproductsandservicesintheeu/index.asp

For any I've investigated, you go to buy at the stated price, then on the next page VAT is added on if you're in the EU.

I wondered if somehow digital stock sales need VAT, but physical art don't, but my reading of the VAT rules didn't suggest that: but IANAL.

I didn't chase it up with my tax accountant because I don't earn enough to be in the VAT bracket, but it made me very curious.

Edited by Cryptoprocta
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3 hours ago, Sally said:

If you are running a business and not just engaging in a hobby, you should register as self employed, even if you epexct to make a loss. There are tax advantages, after all....

 

2 hours ago, spacecadet said:

 

Uh, I did not say I was not registered I said I don't get enough to pay tax.  Still in my first tax year as only went "pro" in June - and for this tax year will be under the £1000 limit even for it to count as a business, not hobby.

My point was regarding the VAT and stuff - isn't that why you employ an accountant in the first place?

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