Just an observation , we are uk based and as such our prices must be displayed in GBP ,although we can also offer prices in USD as an option, we where under the impression that uk companies must dipslay prices in GBP and if vat is added then is must be stated on the website .

My question is i see a few uk companies on wht offering prices in USD only and on their websites they also state that vat is included , does this mean that all these webhosts deduct vat from their prices when usa customers order etc.
How can you say vat is added and advertise in USD ?

Also when you sell a product for £100 + vat (£117.50) your payment processor is taking a % of the total sum which means they are taking a % of the vat
This is all very confusing can anyone shed any light on this, we are going to be vat registered this year and this seems like an accounting nightmare

Originally posted by easily
Just an observation , we are uk based and as such our prices must be displayed in GBP ,although we can also offer prices in USD as an option, we where under the impression that uk companies must dipslay prices in GBP and if vat is added then is must be stated on the website .

There is nothing to stop you from listing all your prices in US$.

VAT should only be charged to customers from the UK.

When listing your prices you should add something like "Plus UK VAT"

Actually for UK Companies they must charge VAT to EU customers not just those in the UK. So it should say "Plus VAT (for EU Customers)"

We list our prices in UKP and USD and state VAT is included.

If someone from outside the EU signs up its just 17.5% more profit for us.

Originally posted by UH-Matt
We list our prices in UKP and USD and state VAT is included.

If someone from outside the EU signs up its just 17.5% more profit for us.

Matt you state on your site that vat is included but you cannot charge non eu clients vat even if you think it`s an easy way to make an extra 17.5% profit
I just visited your site i only see USD, when you send your clients a vat receipt is this in usd as you seem to bill in usd and not GBP .

If your adding vat shouldn`t this be added at the order stage and only apply to eu residents and not accross the board .

I`m not saying you are right or wrong the whole multi currency & vat is confusing to me

I think my best option would be to use 2 payment processors one for eu residents and for non eu residents.
one charging in € & £ the other in $usd without vat

Well we have played it safe for the last few years.

We have vat included in ALL prices.

And regardless of where the order has originated, we have paid VAT on all ordered we have taken - So we are over paying our VAT right now because non EU customers we shouldnt charge or pay vat on.

I will get in touch with our accountant and let you know what the "official" line should be.

Well, how would it make a difference if Matt was adding VAT onto the non EU customers? All Matt has to do is say oh well , it's not really VAT it's just an extra fee we charge for people outside of EU. I don't think anyone would have a problem with that.

My 2 cents.

We pay our VAT to the tax office on ALL Sales, so we actually pay too much VAT. As i said above I will get in touch with our accountant and see what his official line is on it.

We're expanding and will be adding "country" pages, so if you come from the EU and use EUR (€ - although again TB seems to have requested another stick in with the GBP£!) or UK and use GBP£, or USA and use USD$ or Canada and use CAD$!
This way we can tell who will pay VAT, who will not and more.
Of course since the GBP£ measured upon the EUR€ and USD$ - the GBP£ is very strong, it's about £1 for €1.60 roughly now.

What confuses me is why do some people call it UKP??
It isn't, never has and never will. It's always been known as the GBP = Great British Pound. I have never heard of the UKP = United Kingdom Pound. Even on XE it says GBP - doesn't it everywhere??


I think it is quite unfair to charge US clients VAT. It is not soo bad for the UK client or possibly fo rthe EU client. (I say UK because TB does not want the EUR but does want the GBP = EU uses Euro, not pound)
The reason it is fine to charge UK clients VAT is because the GBP£ is soo strong, that there is no worry at all about over-charging them. You may charge like $10 for a package but end up charging ~£7 because of exchange rate, and with VAT it will only be a mere £8!!

.Well, how would it make a difference if Matt was adding VAT onto the non EU customers

Well i never said that matts way was right or wrong , he replied to my post so i looked at his site , to me this way does not ssem correct .
I thought vat was paid to HM Customs & Excise not the tax office .

I spoke to HM Customs & Excise today and they informed me that we can use the Flat Rate Scheme if our annual turnover is below £100,000 .
This way would mean paying vat regardless of the customers location as matt does

We currently refund VAT back to customers outside the EU after they place an order, or alternatively send them to a different payment page.
However, were just about to implement a system that takes a clients country (from registration) and then add VAT or not depending on the location. This is then all confirmed afterwards by looking at the credit card address.

I don't know what the legal truth to it is..

Okay... I live in Alaska... If I go to Washington, I do not have to pay their state sales tax. I am exempt from it.

Just as is the US exempt from your VAT - if your charging them for that, and they are not required to pay it. You are overcharging them, regardless if you pay the VAT on it or not. You're using the money that they overpaid to help you on this VAT thing..

From how I understand it, that is illegal, as your charging them for something they don't need to pay.

HOWEVER, you could reword it and just say that VAT is included for all EU based customers, and that the US prices are simply that, the US prices.

But the way you just said it, "We list our prices in UKP and USD and state VAT is included. If someone from outside the EU signs up its just 17.5% more profit for us." - I'm sure that is very not legal.... or at least ethical by any means.

I contacted the inland revenue a few months back about the VAT issue and just who I need to charge VAT.
Got a nice letter + a couple of booklets explaining it all back.
You only need to charge EU clients VAT at 17.5%.

There is more to it then that like being able to zero rate the supply for eu vat registered business (registered outside of the uk) and registering in other countries but you'd really need to get them to explain :) Or find an accountant that is well versed in VAT issues. And for those that want to know Hosting counts as a telecommunications service, so the place of supply is wherever the customer is situated.