Online Retail

A UK retailer operating online had received advice from their local UK accountant that UK VAT applied to all sales regardless of where the customers were based, and was unaware of their obligation to submit Intrastat reports.

At the point that Accordance started working with the client, the business had been trading for several years and had breached the distance selling threshold in several Member States whilst continuing to charge UK VAT on all sales.

Accordance’s experience working with online retailers and European Tax Authorities helped ensure the client was able to resolve their VAT position.

Accordance was able to:

  • Review historic sales data to determine exactly when thresholds were breached in each Member State to identify the appropriate VAT liability.
  • Approach EU Tax Authorities to obtain VAT Registrations, and where possible to have these backdated to the appropriate date.
  •  Calculate the VAT paid incorrectly to HMRC and liaise with HMRC to organise a refund of incorrectly charged UK VAT.   Accordance was able to ensure the appropriate VAT was refunded from the UK; because of the possibility of “unjust enrichment” it is vital that businesses are able to demonstrate that VAT refunded will be paid over to the appropriate European Tax Authorities.
  • Calculate the VAT due to Tax Authorities and submit the relevant VAT declarations.
  • Make the payment of the VAT due to the appropriate Tax Authorities.
  • Declare appropriate Intrastat Arrivals and Despatches reports.

The approach adopted by Tax Authorities is not always the same. Some Member States require all previous VAT reporting to be corrected, whilst other Member States may require that only the position going forward is considered. There are late registration penalties and interest charges relating to late payment of VAT that apply in some countries .  Accordance is experienced in negotiating with European Tax Authorities on behalf of businesses, and has been successful in reducing or eliminating penalties on the basis of voluntary disclosure.

To find out more, contact us.

E-Commerce VAT Guide
E-Commerce: Distance Selling Registration Thresholds

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