It is now common place to have sold something online using either eBay or Amazon. Some people find a niche and turn this bedroom hobby into a real business, going from strength to strength and often shipping not only in the UK but into Europe and the rest of the world.
It may now be easy to sell, but keeping track of the VAT implications to your business is a messy minefield.
An online seller, Gurpreet Sidhu, spotted this problem after setting up his online shop selling plus size clothing since October 2011.
“I used to just pay 20% VAT on all of my sales, until sometime in late 2014 I realised that I had made such a rookie error. All my sales which I had been selling outside of Europe, to USA and Australia etc were eligible for 0% VAT! This meant I had a VAT reclaim. After re-doing all the accounts, I claimed in excess of £32,000 from HMRC”
It was at this point Gurpreet realised that many online sellers were most likely not paying the correct VAT. Selling overseas means keeping tabs on distance selling thresholds per EU country, currency exchange rates and different VAT rates. It quickly becomes a time consuming task if you want to do it properly.
Out of this frustration Gurpreet came up with the idea of www.CrossBorderVAT.com (CBV).
“CBV basically fetches all your sales data, including any refunds and associated fees, and calculates the correct VAT per transaction analysing all the parameters. Instead of what people normally do, which is to apply a tax rate on an umbrella amount which is normally a monthly figure, getting the VAT completely wrong!”
Gurpreet is gearing up to launch by the end of this month. His very first webinar on the subject and the new software is on the 12th May 2016 at 2pm. You can register your interest here:
For more information, you can contact Gurpreet directly by email email@example.com