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September 2020

VAT Charges for Online Marketplace | VAT Advice for Selling Online | VAT Help Bristol | VAT Advice Online
VAT Charges for Online Marketplace 758 513 Stepping Stones Accountancy

VAT Charges for Online Marketplace

More and more people are setting up their own businesses as a result of COVID-19, whether it be because of redundancy or just taking a fresh look at life following lockdown and deciding to make a change.

When these businesses start out though they only have a small client base, so for these vendors the quickest route to get their goods or services to a larger market can be via a third-party online marketplace such as Etsy or Amazon.

Whilst this is an attractive and seemingly simple way to reach new customers, there are some considerations that need to be taken into account when selling in this way, such as commission fees, transaction charges and VAT charges. Things to be aware of include:

  • VAT is payable on the full price of the product or service, not the net amount after fees have been paid to the online marketplace.
  • If the online marketplace is based outside of the UK, as is often the case, a UK business that is VAT registered must apply the reverse charge on their VAT return.
  • If the sales are to EU based customers, as of the 31st December 2020 it is important to remember that the transitional deal ends and VAT will be charged at the rate of the customer’s country where applicable.
  • Sales to UK customers will be at standard rate.
  • Sales to customers outside of the EU are not liable for VAT.
  • Where a business is not VAT registered, any payments to overseas suppliers are treated as taxable sales.

The rules can seem somewhat complicated so if you are unsure about how they apply to your business it is important to seek advice from and accountant who will be able to clarify what VAT payments are due.

If you have any questions or need some assistance then please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk

The Client Journey 150 150 Stepping Stones Accountancy

The Client Journey

In our latest animated video we give an example of how simple it is to outsource all of your accountancy needs to Stepping Stones.

The Power of Diversification | Accountancy Support for Diversification | Helpful Accountant in Bristol
The Power of Diversification 758 513 Stepping Stones Accountancy

The Power of Diversification

In today’s ever-changing landscape many businesses have had to take the approach of adapt or face the harsh reality of closing their doors. This is especially true for the retail sector.

For example, the local fruit and veg supplier with a small shop on the high street will testify that they had to be innovative and resilient in order to survive. With everybody locked down and shops closed nobody was able to call and shop for their fresh fruit and vegetables, instead they had to diversify and accept orders online and via telephone, then deliver door to door.

Very quickly they had to put in place a simple online ordering system which customers could use and then plan a logical delivery route in order to efficiently fulfil the orders. After 1 week the shop had tripled its orders and were asked if they could expand their product range to include other items. So, in order to meet the demand, they were able to introduce an additional 200 products to their range.

The long-term future also looks bright and the shop has opened its doors again which means that not only can it can now offer more products, it provides customers with the choice of purchasing face to face, via telephone or online and can deliver to homes within a 15-mile radius. All of which they had not even considered prior to COVID-19.

The one area that really helped the shop was the role of their accountant. They spoke at great lengths with their accountant who provided advice, recommendations and guidance on what to do and what would be needed in order to meet the demands of a varying client base. Any small business needs to be surrounded by good people and an accountant can become a very valuable business partner both in good times and bad.

If you own a business and are thinking about diversifying, then our team would be delighted to answer any questions. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk

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