Sole Trader VAT Registration

[Rocka2]

Hi,

I'm a UK sole trader and I receive royalty income mainly from a US company (90%) and a small amount from a UK and European company (10%). My music is mainly streamed by a US company who then pay me a royalty. My annual income is nearing the £83,000 vat registration threshold and I'm wondering if it goes over the threshold do I need to register for VAT? Is royalty income for a service provided to a Non-EU country outside the scope for UK Vat?

So I'm wondering can I exclude my US royalty income when determining if I meet the £83,000 vat registration threshold and if so do I not need to register for VAT?

Thoughts and opinions would be much appreciated!

Thanks.

[les35]

B2B General Rule services are outside the scope of VAT when the Place of Supply is outside the EU. However, you are still entitled to recover input tax in relation to such services. Unless you have only a small amount of input tax, I would consider registration, to recover it.

[Rocka2]

Thanks Les35. I currently offset the gross amount of all my expenses against my royalty income in order to determine my taxable income for income tax purposes. Should I only be offsetting the net amount even if i'm not VAT registered?

Ideally I don't want to have to register for VAT if i am below the £83,000 taxable income vat threshold. So in order to determine my £83,000 taxable income vat threshold, can I exclude my Non-European royalty income?

Thanks!