- Selling across borders
eBay Global Shipping Program
Amazon EFN or MCI
- Holding stock in warehouses outside of your home country
Amazon FBA centres in Europe or USA for example
- Selling at different VAT rates
VAT can be a minefield, negotiating through it can be very time consuming and expensive, especially if you are overpaying. You need to know each of your sales individually at the micro level, macro sales figures of weekly/monthly sales reports are no longer enough. This is where we can help, introducing crossbordervat.com, we can save you money and time.
These are some of the things you should be aware of…
- Keeping evidence of sales in your accounting system showing how VAT was calculated
- Reconciling every single sale and refund to the correct shipping destination country
- Applying the correct VAT currency exchange rates against your sales and refunds
- Recognising that at some point you may have to pay VAT directly to other countries in the EU
- Immediately if you have shipped goods for warehousing in a EU country and sales are being made
- At a later stage when you break the threshold of sales into a EU country
- Last but by no means least…Knowing that you do NOT need to pay any VAT on sales outside of the EU
Crossbordervat.com will make your business life much easier by doing these things automatically without you having to download reports from different sales channels and then manually use excel to normalize your data so that you can work out your VAT liability. Crossbordervat.com will take care of all your sales and refunds individually, then apply a pigeon-hole technique to them all one by one, so that the correct VAT rate is applied to each transaction. These are your micro sales and it is paramount to be inspecting your sales with this much detail if you are selling and shipping out of the UK. It is also a great time saver even if you only ship domestically but apply different rates of VAT on different products. Consider for example that a single transaction should be filed away in only one of these pigeon-holes:
- Standard EU sale shipped to the UK – normal rate of 20% VAT to HMRC
- Reduced Rated EU sale shipped to the UK – reduced rate of say 8% VAT to HMRC
- Standard EU sale shipped outside of the UK but no sales threshold broken – normal rate of 20% to HMRC
- Standard EU sale shipped to Germany, where you have broken the sales threshold – normal rate of 19% VAT is paid directly to German Authorities
- Standard Rated EU sale shipped from a Spanish warehouse to Belgium – normal rate of 21% is paid directly to the Spanish Authorities
- Shipping destination is outside of the EU – no VAT is paid to HMRC, meaning an extra 20% profit for your books
- This list can go on and on and on!
Are you forever digging into Amazon transactional reports, full order reports or requesting that PayPal notify when you can download a Full History CSV! Then trying to filter the endless data you have so that it matches your sales and refunds summaries from each marketplace…sound familiar? Pivot tables and vlookup’s driving you mad? This process can take hours, eating into your valuable time, some EU countries require you to file your VAT return every month, so those hours turn into days over the year! The more marketplaces you sell on the longer this will take and the more reconciliation you will need to do. This is not an efficient process to have in your business toolbox, outsource this process to crossbordervat.com!
Crossbordervat.com will sync up with your PayPal account as well your Amazon Seller Central Europe and USA account and download all your sales transactional data from the day your account was setup with them. We have decided to get the raw data this way and not use marketplace aggregators like Magento and Shopify etc., because essentially not all monetary movement and data gets recorded by these Omni-channel platforms, consider sales refunds for example, they get missed entirely.
We need to go to source to get the data and calculate the exact VAT liability, which is exactly what the friendly tax officer wants us to do. You may be selling in places other than eBay or Amazon, we understand that so we also have the option for you to be able to upload data via CSV directly on to crossbordervat.com, maybe you have some sales which come from your website and directly into your High Street Bank account. We will of course be adding more sales channels in the future, to make your life even easier as cross border trade grows, but initially we are sticking with eBay/PayPal and Amazon Seller Central Europe/USA.
Figure 1 – PayPal Screenshot
I have been trading online for over 3 years, selling fashion online, so I know first-hand, how much time this process can take if you want to do it correctly. I have broken through the selling threshold for Germany, and so I have to file a VAT return directly to Germany every month. Manually having to download sales data from PayPal (GBP, EUR, AUD, CDN and USD), Amazon Europe (UK, Germany, Italy, Spain and France) as well as Amazon USA (Canada and USA) would mean downloading at least 12 files of sales data in their raw format. I would need to also download another 3 files so I can pick up the shipping countries and match with the sales data using vlookup’s and pivot tables. Just normalising the date format across all the Amazon channels is a headache in itself! This monthly task, takes me at least half a day, and has now vanished, crossbordervat.com does all this and more so I can concentrate on other things in my business.
We are looking for sellers who are selling outside of the UK and experiencing some of the difficulties mentioned above. We would like to offer you 1 year’s free access to the system, if you help us during the beta testing phase. If you are interested or have any questions please contact me directly here [email protected] or visit my linkedin profile.