We already use SAGE or Xero?
That’s great, Sage, XERO and QuickBooks are quite common amongst online businesses. However they are not built to be able to plug in to your selling channels and download all relevant VAT data.Each transaction on your selling channels needs to be treated individually and the correct VAT rules applied. Almost all online accounting packages treat your sales as a whole and not individually.For example you may have £12,000 of sales in a given period, if your business is UK based, you would expect to pay 20% VAT to HMRC which in this example equates to £2,000. However, if you are selling cross border, some of your sales may have shipped to Jersey, Monaco or somewhere outside of Europe, which would mean on those sales there is “NO VAT” to pay. In this example you would be overpaying VAT to the tax authorities.If you are shipping cross border, you may be enrolled in the Amazon PAN-EU program. This means that Amazon is moving your goods around to its warehouses across 7 countries. UK, Germany, France, Italy, Spain, Czech Republic and Poland. This means that you need to be registered for VAT and have valid VAT Registration numbers in all 7 countries. Meaning that now you will be filing VAT returns in most cases quarterly in the UK and monthly in the other countries, dealing with payments to Tax Offices in Euros, Czech Koruna and Polish Zloty. In this case the EU Distance Selling Thresholds do not apply any longer, because you are no longer distance selling, because your goods are locally stored for shipment.EU Distance Selling Thresholds will apply to you if you are shipping from your central domestic country of operation, and they will also apply when shipping from any of the Amazon PAN-EU warehouses. So you may be shipping to Austria from sales on eBay, Amazon your Shopify Store. Shipments maybe dispatched from the UK (your own warehouse), Germany (Amazon warehouse) and Poland (Amazon warehouse). The EU Distance Selling Threshold in Austria is €35,000. You may be doing sales in GBP, USD and EUR across your different selling channels. Now you will need to monitor the NET accumulated sales into Austria from all your selling channels, every calendar year. Can your accountancy software do all of the above? If not, then speak to us, we are here to help.
Why should I believe that your VAT is report correct?
We have done our due diligence alongside established accountancy firms who have approved our VAT and algorithms. We are very confident that your data is accurate and in real time.
You’re a third party why would I want to share my sales data with you?
Our software is fully encrypted, and we use a secure dedicated server with front facing servers to ensure that all your data is protected. We use amazon web servers who are safe, and we are simply just a tool to help calculate your VAT. For some businesses, there is also two step authentications for logging in.
We already have a bespoke software program created for our business, so we are good thank you?
That’s awesome! You would not need to make any changes what so ever. All that would change is that your VAT and transactions can be looked at into more detail and you can monitor your sales history. You may even be owed VAT which can only be seen through Cross Border VAT and you can go as far back as 6 years.
SAGE does everything for us and I wouldn’t want to spend anymore time on new software or trials?
SAGE is great software and many businesses use SAGE but it will not tell you if you pass a threshold. Lets look at an example: So if you are making sales to Germany who’s threshold is 100,000 euros per year, you wont have anyway of measuring that information as SAGE only calculates the VAT for the transactions. This could lead to fines and penalties as it fails to comply with your EU VAT obligations. Cross Border VAT however, will give you notifications that your getting close to a threshold and that you must register in that country beforehand. No other software will do that!
Will Cross Border VAT be able to track the item being moved around Europe via FBA?
Yes! One of the reports that Cross Border VAT pulls in is the FBA inventory report. This will tell you from which 3 letter airport code that sale was shipped from and to.
I was told by my accountant that the VAT threshold doesn’t apply when you have physical inventory in the UK?
The answer to this is that the threshold does apply and if you are shipping to someone in the UK, 20% VAT applies. If shipping outside the UK into the EU, then as long as that countries threshold has not been passed, you would declare that sale to HMRC.
How will Brexit have an affect on cross border VAT obligations?
There will be more of a need for this software as this will be able to record every single detail involved in the sale, so you would have yourself covered for VAT obligations. Brexit will only make the process stricter which means there will be more details required which Cross Border VAT can provide.
What are the benefits of taking payments in different countries?
There are benefits if you can hold onto that currency. For example; if your paid in Euro’s then keep them in a Euro’s account. Change that foreign currency when the exchange rates are good. This will benefit you. So maybe getting a domestic account will help you!
Are there limits selling from the UK to the US for VAT?
There is not a threshold limit for the US, as there are different state taxes which are individual for each state.
Does Cross Border VAT break down 0% VAT and 20% VAT by order or item?
Yes! We consider every single transaction as a separate entity and a separate row. Every transaction may have more then 1 item in it so every row within a normalised file will all be a different row for any item, so the transaction ID will be the same, but the product will be different. Each one of these items will be 0% or 20% depending on what it is.
If I only have registered my business in the UK but I sell cross border, is there any need to register in the cross-border country as there are separate boxes on the UK VAT return?
There isn’t but every country is different. For example; Germany has a law where you have to offer free returns and you must have a local returns address. So each country has to be looked at individually and you must find out what applies in your category of industry’s VAT.
How can you reconcile with your bank?
We are giving you the correct VAT calculations, The figures will be correctly pigeon holed with the correct VAT and other sales data compartmentalised before it can be added to your accounting system. That’s the point of the normalised file.
How is VAT collected?
The seller will charge VAT on a product which will be sold to customer, and the seller then makes a payment to the government. Failure to do so can result in a major penalty or even jail.
How long will it take me to set up my Cross Border VAT account?
The process doesn’t take long at all, you need to add your marketplaces through the Cross Border VAT dashboard and follow the instructions given thereafter. You must then download all your sales data by requesting a report which will then back track the history of your sales and your VAT information. We can go as far back as possible right to your first transaction.