Hypothetical vat question

Hypothetical vat question

Author
Discussion

pigface1001

Original Poster:

45 posts

55 months

Friday 31st January
quotequote all
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?

Mr Pointy

12,553 posts

174 months

Friday 31st January
quotequote all
It looks like you might need to register & charge US Sales Tax:

https://www.gov.uk/guidance/the-vat-rules-if-you-s...

pigface1000

80 posts

73 months

Sunday 2nd February
quotequote all
thanks for that