UK Ecommerce - VAT!

* groan * is this mean we all have to start registering VAT now

[pixels]

[news.bbc.co.uk...]

According to the new European directive, all internet firms trading in western Europe must now charge VAT on services and products sold from their sites, if the sellers live in a European country.

This does not sounds like a good news to me.

Does anyone know where further information can be founded?

Pixels

[mole]

HMCE are a nver ending source of entertainment - top of their list is their "VAT Notes" document which comes out every quarter.
This document explains why you have to charge VAT on outboard motors for boats, but not inboard motors.
Why you have to charge VAT on second hand horses and ponies, but not racehorses.
Why you have to charge VAT on technical books but not educational books.
Why you have to charge VAT on takeaway food, but not food eaten on the premises.

Clearly, someone in the UK government has LOST THE PLOT.

Dare I mention Intrastats?

[peewhy]

Just slightly off topic for one second, in the UK we pay VAT on Chocolate biscuits ...but not on plain biscuits.

Lost the plot? they never found it!

I wonder if they create a bill such as the VAT on e-commerce related goods to EU customers on the understanding it will kick off and among the outrage, very valued point will be made, and then taken on board to reform the original bill.

A backward way of asking for opinion.

[pixels]

Clearly, someone in the UK government has LOST THE PLOT.

Didn't you know it happened long ago.

Rule is, they just make it up as they go along, whatever suits them, bend the law!

Pixels

[peewhy]

I've posted this in the other related thread but... what happens if the e-product is free. Customers pays for a tangible product, say a CD, including shipping and simply downloads a free backup.

[lindajames]

I have a online business setup in the U.K. and I will be registering for VAT soon, ive been told that I have to charge all customers that reside in a EU Country. Is this true? so I only charge VAT to customers in:

Austria 20%
Belgium 21%
Denmark 25%
Finland 22%
France 19.6%
Germany 16%
Greece 18%
Ireland 21%
Italy 20%
Luxembourg 15%
Netherlands 19%
Portugal 19%
Spain 16%
Sweden 25%
United Kingdom 17.5%

So, what about all other customers from all around the world? are they VAT Exempt?

Any suggestions would be appreciated.

Cheers
Linda

[dmorison]

Hi Linda,

It's not a straight forward "you do" or "you don't" i'm afriad - the flow chart on the HMCE website for a UK business has 8 decision boxes on it!

I would recommend you start with the Internet Trading FAQ on the Customs and Excise website:

[hmce.gov.uk...]

[lindajames]

this is too confusing, i've never been involved in VAT before. Does the £56,000 annual turnover threshold still apply?

Any plain english explanation of this new legislation would be appreciated.

Cheers
Linda