Selling a domain

[paul]

I've been negotiating a sale on sedo over the last couple of days, I added a comment to my first reply and this is what I got back

Me: Price includes VAT

Buyer: This is the best offer I would be willing to make, Please note: Vat is not chargeble on this type of sale

Me: VAT is chargeable, by law, on every sale I make as I'm vat registered. What you maybe thinking of is the agreed selling price on sedo is not subject to 'additional vat'. This just means the seller has to allow for vat in their selling price if they're vat registered, as I am.

Buyer: Only if your business is buying and selling domain names do you charge VAT. this is not deemed a product for resale for vat purposes in the normal trade for a business. My offer remains and I do hope you consider it. Thanks again.

Me: Started to type something thought better of it and cancelled the negotiations


"this is not deemed a product for resale for vat purposes in the normal trade for a business" is he mad or is it me?

[yesterday]

http://customs.hmrc.gov.uk/channelsP...00102#P53_4056

HM Revenue's zero rating page doesn't contain search term domain but does contain
"The supply of text by electronic transmission, via the internet, or similar means is also standard-rated. Such supplies are of services, not of goods, and different VAT rules will apply to them (such as those on the place of supply of services – see Notice 741 Place of supply of services"

I haven't looked at Notice 741 yet.

yesterday

[yesterday]

At the bottom of this page

http://customs.hmrc.gov.uk/channelsP...E_PROD1_024503

it mentions domain names (search page for domain) and mentions them as "intangible assets"

The Notice should include a list of factors that might help determine whether a TOGC has taken place. For example: property, plant, staff, business records, stock, debtors and creditors, goodwill, intangible assets, etc. Intangible assets can include domain names and trademarks

It seems to treat domains as TOGC "treated as a going concern".

yesterday

[yesterday]

I can't find what treatment domains have but TOGC looks very complicated.

It did say

(i) Where a seller cannot obtain a ruling, and he wrongly applies TOGC treatment, he may not be able to pass on the cost of any VAT he should have charged the buyer after the event. The contract may have specified a tax inclusive sum. The purchaser should also be able to obtain a ruling. Where TOGC treatment was in error not applied, he has to try to obtain a refund from the vendor of VAT charged in error - and the vendor may have disappeared. It is unfair to shift liability for incorrect actions or declarations by either party to the other party.

so in other words if you don't charge VAT and the lovely tax man decides you should have, he will charge you and you probably won't be able to go back to the buyer and charge him more, so better charge now and refund later if needed rather than the other way round.

yesterday

[Jeewhizz]

Although I don't have a direct ruling on this, my accountant looked into this for me, and assures me that VAT is chargeable on all domain sales - he basically said the same as above - it's not written 100% in stone, but you are better off charging it if you are VAT reg'd, and refunding at a later date.