Hypothetical vat question
Discussion
If you set up a UK-based LTD company, but the majority of your business is conducted in the Americas, how would VAT apply?
For example, suppose you run a 100% service-based business selling in-game skins for an online game. The game servers are located in the USA, payments are processed in the USA, and you simply collect the profits after deducting server costs. Expected annual profit exceeds £100,000 - £150,000
UK sales would be minimal—likely under £20,000—so they would presumably be subject to VAT.
Would you be required to pay VAT on the overseas revenue, or would this fall outside the UK’s VAT scope, meaning you only need to pay corporation tax and income tax on any salary drawn?
For example, suppose you run a 100% service-based business selling in-game skins for an online game. The game servers are located in the USA, payments are processed in the USA, and you simply collect the profits after deducting server costs. Expected annual profit exceeds £100,000 - £150,000
UK sales would be minimal—likely under £20,000—so they would presumably be subject to VAT.
Would you be required to pay VAT on the overseas revenue, or would this fall outside the UK’s VAT scope, meaning you only need to pay corporation tax and income tax on any salary drawn?
It looks like you might need to register & charge US Sales Tax:
https://www.gov.uk/guidance/the-vat-rules-if-you-s...
https://www.gov.uk/guidance/the-vat-rules-if-you-s...
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