New tax policies have also sprung up in response to unprecedented events like The UK’s HMRC cracked down on ecommerce tax compliance, making it clear that they would be more strict on the rules moving forward.Īfter Brexit, there were more changes, and the UK set its own rules, which we’ll cover later. It is essential to stay informed about any changes that might affect you. Sales tax, whereas in Australia and New Zealand, it’s called Goods & Services Tax (GST). VAT has different names worldwide with varying rates and rules, but it’s the same concept. These are generally necessities like fuel, heating devices, cleaning products, transport, pharmaceuticals, books, and food. ![]() The VAT rate ranges from 17-27% depending on the country, with “parking,” “reduced,” and “super-reduced” rates applicable to certain consumables. You simply hold onto it before you file a tax return-that is, if you need to collect VAT in the first place. ![]() It’s a ‘pass-through’ tax, in that the sum should pass through you from buyer to tax authority. Income tax, VAT is not taken from sellers but added to the cost of buying an item. VAT is imposed on goods at each stage of their supply chain-when value is added to them as products, so is the tax. Value-Added Tax (VAT) is the consumer spending tax in the European Union and the UK. ![]() Our trusted accountant directory to find an ecommerce accounting professional. Looking for something else? You might find our other guides useful:ĭisclaimer: This article is intended only as a guide and should not replace professional advice and tailored support for your unique circumstances.
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