Grow your business and look to selling outside the UK
If you are having problems growing your business in the UK you should look to selling to the EU market or even further afield. Do not underestimate the perception of UK products and services in parts of Europe, China and Asia. These are growing markets.
Look to Europe
Who are your customers? What are their purchasing patterns?
It may require different pricing in each local country. Also the product range might be different from country to country.
Depending on your sector and to whom you are targeting, if the customers are consumers or small businesses they may prefer to buy “locally” and it may be beneficial to have a “presence” in the target country, with either a branch or an agent acting on your behalf. However, the back-office and logistic services can continue to be carried out in the UK. Under the distance selling VAT regulations there is an annual limit to the value of goods that can be sold to non VAT registered customers from another member state. If this limit is reached the seller is required to register in that state, even though the seller has no “presence”.
Although the European Union (EU) is meant to be harmonised, different members have different regulations and licensing requirements. It is usually compulsory to be registered for VAT. This must be borne in mind if you do open a branch.
Work with local banks to understand the type of payment method your customers would expect, it may make the difference in clinching the deal.
If you are selling to other EU Member States there will not be any Customs Duty to contend with.
If you are selling goods to businesses in another member state then you do not have to charge UK VAT. The VAT will be accounted for by the customer. You will have to complete Intrastat returns and an EC sales list.
If you are selling services, as from 2010 the ‘place of supply rules’ have gradually changed. Apart from services attributed to land, most services supplied to an EU business are free of UK VAT. The VAT will be accounted for by the customer under the ‘reverse charge’ rules. You will have to complete an EC sales list.
If your customer is not VAT registered (or you cannot obtain a VAT registration number) you will have to charge UK VAT at the rate applicable to your product or service. As mentioned above, for supplies of goods there is a turnover limit applicable to each EU country before you have to register for VAT in that country. This turnover limits are €35k and €100k depending on the economy of the country.
For some businesses, the thought of selling to Europe is very daunting due to the regulations etc. Ann is making it easier by offering workshops and courses so that you can trade outside the UK.
To find out about The VAT Lady courses go to www.thevatlady.co.uk
or contact email@example.com or telephone 08456 344 785