VAT when selling domains to customers in the US/China

[tomclowes]

Hi all,

I was wondering as to whether someone could provide me some clarity on VAT registration requirements.

Previously (as an individual), when buying a .co.uk domain name off a British business, I had to pay 20% extra as VAT (because they were VAT registered).

Now (as a company) I am looking to sell .com domains to customers in the US/China. My understanding is that selling outside of the EU I do not have to register for VAT even if my sales are in excess of £82,000. That is to say that sales to outside the EU do NOT count as 'taxable supplies'. Is that correct?

Many thanks.
Thomas

 

[donton]

As far as I'm aware you have to register for VAT when you reach the turnover threshold, regardless of where you're selling to. However you zero rate any VAT on sales to buyers in the USA or China. You can also claim back the VAT you pay on any purchases in the UK once VAT registered, which in some cases can result in a cheque from HMRC if you paid out more VAT than you charged.

A consultation with a good accountant is far better than any forum post, so it might be worth digging out the Yellow Pages or asking any friends in business if they can recommend a good accountant to clarify for you.

 

[Edwin]

Here's the most relevant page
https://www.gov.uk/vat-registration/calculate-turnover

(The advice to talk to an accountant is always a good idea!)

 

[tomclowes]

Appreciate the insights. I agree, getting a professional accountants view is important, but given that most people here tend to be educated and sensible individuals it is helpful for getting a quick and easy overview.

My reading of Edwin's link is that because you have to include "the total value of your UK sales", and can "exclude VAT-exempt sales, and goods or services you supply outside of the UK" that my understanding is correct. Is that how you read it Edwin?

 

[Edwin]

My reading of Edwin's link is that because you have to include "the total value of your UK sales", and can "exclude VAT-exempt sales, and goods or services you supply outside of the UK" that my understanding is correct. Is that how you read it Edwin?

Pretty much - but for that sort of thing I always seek out the advice of a professional so I couldn't give you a definitive answer.

 

[tomclowes]

Pretty much - but for that sort of thing I always seek out the advice of a professional so I couldn't give you a definitive answer.

Many thanks !

 

[anthony]

Ask Sedo for advice.

 

[gimpydog]

Now (as a company) I am looking to sell .com domains to customers in the US/China. My understanding is that selling outside of the EU I do not have to register for VAT even if my sales are in excess of £82,000. That is to say that sales to outside the EU do NOT count as 'taxable supplies'. Is that correct?

Many thanks.
Thomas

Yes.

If your input taxes are low (as they should be, if you are doing good business), then there really is no point in burdening yourself with VAT.

Some people think VAT registration will add a degree of credibility to your firm. That might be true in the UK, but the Yanks & Chinese won't give a toss about it, only the price they pay.