New to RSP, so possibly a stupid question.

[Adg385]

Hi, I was wondering, since RSP charges VAT to most of the EU, does RSP as a result pay the tax to whoever needs paid? For example HMRC? I can't imagine if they did then I'd need to deal with paying the VAT bill myself at any point? As I see it, VAT is charged at purchase, a VAT email sent to the customer and the money between wholesale and before VAT was added is what I get yes? So if I was to pay anything to HMRC, it would be income tax? Am I correct? Possibly a stupid question sorry. Thanks in advance for any help.

[c.ivanov]

Hello,

We are a UK registered company. As such ALL EU members which are our clients pay 20% VAT.

You do not have to deal with paying the VAT yourself as we do pay taxes at the end of each financial year which is somewhere around April here in England.
We pay taxes to the Inland Revenue office.

VAT invoices are provided via e-mail to clients for their records and you also receive a copy of them.
If a client is a company they would enter their VAT information and registration number and be exempted from further taxes.

Best Regards,
Cvetan Ivanov

[clivejo]

VAT is a tax that's charged on most goods and services that VAT-registered businesses provide in the UK. It's also charged on goods and some services that are imported from countries outside the European Union (EU), and brought into the UK from other EU countries. VAT is charged when a VAT-registered business sells to either another business or to a non-business customer.

Source : http://www.hmrc.gov.uk/vat/start/introduction.htm

Liquidnet which is the company behind RSP is a UK registered company therefore charges UK VAT at 20%. They will have to collect the VAT and submit returns to the HMRC. The only reason you might need to worry is if you are a VAT registered company and buying services, in this case you could claim the VAT back from HMRC.

Regarding prices, you as a reseller set your retail prices, which are then displayed on your store. You will receive a commission payment which is retail price minus wholesale price. If VAT is to be added (ie the customer is in the UK or EU), this is added to the retail price at the point of sale (ie when the customer is about to pay). One of my personal issues is that the VAT is not mentioned until the customer is about to pay. In the UK most people expect the VAT to be included in the price they see.

Income Tax is another thing altogether. When you receive your commission cheque/payment this is considered an income and you will be responsible to declare this income and pay any income tax that is owed on it. Usually this is done via Self-Assessment Tax returns.

[iads]

Sounds like the equivalent of a US Sales Tax....

[theLarry]

Income Tax is another thing altogether. When you receive your commission cheque/payment this is considered an income and you will be responsible to declare this income and pay any income tax that is owed on it. Usually this is done via Self-Assessment Tax returns.

Sounds like the equivalent of a US Sales Tax....

Exactly... We're Yanks. We'll recieve some sort of income statement from Liquidnet (perhaps our US 1099 form or its English equivalent) so we can report the INCOME/COMMISSION paid directly to us. It works the same way with our reseller brand with "the other guys". Any other taxes or operations fees are between parent companies and their respective governments/jurisdictions.

[clivejo]

With RSP now having an office in the US, wont there be a sales tax of sorts on customers in the USA?

[theLarry]

With RSP now having an office in the US, wont there be a sales tax of sorts on customers in the USA?

I think donerite can answer better as its affecting him... but the way I understand is sales tax is only charged on customers which live in a state where RSP has their offices. I believe US folks in Florida indeed pay tax, customers in Georgia, would not. Also I believe that governed state by state as well, so another state might not charge sales tax even if RSP had a corporate presence. At this point here in the states most internet regulations are state by state.

[doneritehosting]

RSP now has a physical presence in miami so florida residents will pay 6% state taxes on purchases... rest of the US is fair game so far...

Same thing with Amazon too... they opened a wharehouse in florida so florida residents have to pay 6% sales tax when ordering from them too..