Question for any VAT registered UK business owners...
# water-coolerd
davla
11/25/2022, 9:43 AMQuestion for any VAT registered UK business owners here. We run a UK based SaaS platform that charges annual subscriptions to UK organisations (mainly schools) and we charge 20% VAT on the subscription price. We now need to be able to offer subscriptions to overseas organisations (schools in non-UK countries). What are the VAT implications? Do we charge VAT at UK rate, or do we have to register for VAT in each country and charge their local rate or do we simply not charge the VAT because it is a B2B transaction?
a
Adam Cameron
11/25/2022, 2:37 PM
Question for any VAT registered UK business owners hereAs @richard.herbert alluded to... this is a question for your accountant, not a bunch of computer programmers hanging around a fictitious water cooler. You can't / shouldn't act based on anything anyone here says. Except me, when I say "this is a question for your accountant, not a bunch [...]"
Adam Cameron
11/25/2022, 2:38 PM
Any VAT registered UK business owners here would have asked their accountant in the first place, after all 😉
d
davla
11/25/2022, 2:39 PMI have asked the accountant - meeting on Tuesday. I thought I would ask here just in case anyone with SaaS experience and VAT had any info.
✅ 1
a
Adam Cameron
11/25/2022, 2:48 PM
VAT though, is a tax on the consumer, not on the supplier. It's just left to the supplier to do the leg work in gathering it and sending it on to HMR&C
So only consumers within HMR&C's jurisdiction would ought need to pay it.
You had perhaps also ask the accountant what to do about similar taxes levied in the tax jurisdictions you are providing the service in.
👍 1
a
alexpixl8
11/26/2022, 10:43 AMSo it depends on what you are selling the two factors are country of supply and country of consumption so in an example where I’m a uk based company and I’m selling to Spain I might need to charge Spanish vat, there are different rules on physical vs virtual products but also bear in mind when the rates change or are scheduled to change
alexpixl8
11/26/2022, 10:45 AMWe produce a system called https://readymembership.com so do subs and it’s far more complicated than just knowing the rates it’s also about how often they change and having the capability to set the rates to change on certain dates
alexpixl8
11/26/2022, 10:47 AMWe did an integration with octobat which greatly simplifies this but that’s recently been acquired and isn’t accepting new signups there is another service for easing the pain on this I can dig it out or would be happy to talk about how we could provide a subs engine headless
alexpixl8
11/26/2022, 10:49 AMYou might look at paddle or https://www.avalara.com/us/en/index.html
alexpixl8
11/26/2022, 10:50 AMEurope is one thing but if you are building this and thinking internationally bear in mind US and other countries have state and regional levels too with thresholds based on how much you are selling into that state and then filing requirements
alexpixl8
11/26/2022, 10:51 AMAlthough the advice in hear is speak to accountant in my experience of this very few will have the knowledge outside of Europe, avalara would be a good bet
d
davla
11/26/2022, 11:05 AMThanks @alexpixl8 that’s really useful info. I suspected it wasn’t as simple as implied on HMRC site. We will be speaking to the accountant this week and his VAT person so will see what they say. Actually we have a couple of clients in common that also use our system. It might be good to have a dm conversation at some point.