VAT on Sales Via Website

[ainaedil]

If a business selling desiner clothing through website(UK company trading via website) to EU customers and Shipment is sent to customers direct from India.

What are UK VAT and import duties implications?

If I have a client who lives with the UK or EU, and they place an order on the website ( registered in UK).

The designer in India then ships the item directly to the customer (without shipping to myself first). How will VAT work in this instance? I assume the customer will have to pay import VAT and duties as applicable?

Therefore, what would my own VAT liabilities be in this instance?

Thank in Advance.

[Generix]

If a business selling desiner clothing through website(UK company trading via website) to EU customers and Shipment is sent to customers direct from India.

What are UK VAT and import duties implications?

If I have a client who lives with the UK or EU, and they place an order on the website ( registered in UK).

The designer in India then ships the item directly to the customer (without shipping to myself first). How will VAT work in this instance? I assume the customer will have to pay import VAT and duties as applicable?

Therefore, what would my own VAT liabilities be in this instance?

Thank in Advance.

It depends on the agreement you make with your customer (the small print on your website), usually such sales dispatched from outside the EU will put the onus on the customer to be responsible for Customs clearance (i.e. Customs Duty and VAT), and therefore you have no VAT to worry about.

If you however are making 'DDP' retail sales, then the VAT and customs Duty is your responsibility.

Most non-eU mail order businesses leave it to the customer to sort out.

You should always make the customer aware of this though, and not have it as an ultra small print clause.

[ainaedil]

Thank you for your reply.

As my company is UK resident and card payment coming in UK account does it change the scenario.

Rest remains the same, i-e Only shipment is made via India direct to customer.

I am a bit confused.

Thank you.

[Generix]

Thank you for your reply.

As my company is UK resident and card payment coming in UK account does it change the scenario.

Rest remains the same, i-e Only shipment is made via India direct to customer.

I am a bit confused.

Thank you.

Providing you can evidence (a) the goods go direct from India and (b) that the supply is DDU to the customer; then my advice stands.

If the goods are T2 status (in EU free circulation) when the sale is made then the distance selling rules will come into play.

So if you start sourcing stock from the EU or importing the goods in your name before the sale, then you will need to start thinking about the VAT.

From a commercial point of view, will your customers be happy being slapped with Customs Duty and VAT charges on their purchases? Which they might have assumed they are purchasing on a DDP basis (as most mail order transactions are)?