VAT on computer software

[Ragwin]

I plan next year to sell a computer program through a 3rd party retailer website. They act as the retailer/distributor, charge and collect the VAT from sales to 24 countries. I think they pay the VAT too to the revelant tax authorities.

Does this mean I would still have to register for VAT if my sales exceed the VAT threshold? My business is software development, not retailing.

Thx

[spidersong]

If the contract is that you have sold the software to the platform, and then they resell it, or that they are paying you a 'copyright fee' or something similar for each sale, then you are receiving income for a supply you've made in the course of business. That is part of the very definition of a taxable supply and if your taxable supplies exceed the registration threshold then you need to register for VAT.

VAT isn't only relevant to retailers; manufacturers, wholesalers, consultants, service suppliers, commission agents, advertisers all need to register for VAT if they pass the threshold.

That being said another part of the definition is that it needs to be a supply made in the UK, so you need to look at HMRC's website for 'place of supply', bearing in mind where your customer may be based and workout whether the supply is taking place in the UK or whether it's in their home country (if they're not in the UK).

You also need to be sure on this line in your post 'I think they pay the VAT to the relevant tax authorities', you'd better be sure just in case those authorities come looking to you for their money, so review the agreements carefully to make sure they're not just acting as your agent in the sale but that they will be the principal in the supply to the end customer.