Knowledge is stuck! How does the UK use low tax rates to pay less tax,安博国际财税（深圳）有限公司

Europe is an attractive market for many cross-border e-commerce sellers; Among them, the UK is the choice of most sellers to open the Road to Europe, because compared to the European countries generally 20% VAT rate, the UK's low tax rate will be more attractive to sellers, today Amber will focus on the UK tax.

There are two optional ways to declare VAT quarterly in the UK

Standard Rate declaration STN and Flat Rate Scheme (FRS).

UK FRS Flat VAT7.5% (1% discount in first year), a Flat rate scheme. The low tax rate is relatively low compared to the Standard VAT rate of 20%. It allows you to calculate VAT using a flat rate, depending on the type of business, multiplied by your total tax-inclusive turnover. This type of declaration is not the legendary low declaration, is to meet the requirements of the tax bureau compliance operation.

01 Flat VAT in the UK

VAT registered in the UK and expected annual sales of no more than £15W in the next 12 months if not already on sale; Flat VAT Rate can be applied/adjusted if sales have already started or are currently at Standard Rate and the total sales in the past 4 consecutive quarters does not exceed £15W.

02 Conditions of use for the low UK tax rate

1、Total sales for four consecutive quarters do not exceed ￡23W;

2、Import declared value Not less than2% of sales or more than £1,000 / year (£250 / quarter).

From April 1, 2017, the tax calculation rate for FRS declaration will be adjusted from the original single tax rate of 7.5% to two different tax rates of 7.5% and 16.5%. 16.5% is the lower tax rate which does not meet the second condition above, because the tax bureau will think that what you sell is luxury goods. Therefore, Flat VAT rate will be adjusted according to the highest Flat VAT rate of 16.5%.

03 How to apply for a lower tax rate

When registering VAT, the seller should put forward the tax rate use scheme. After the VAT is successfully registered by the tax agent, Continue to Apply to the tax bureau for lower rates, The limitation of application is 1-3 months. Of course, not all low-rate applications will be successful, and the tax office may reject them for some reason.

At present, there are some tax agents who fail to apply Flat VAT low tax rate for customers, but they calculate the Flat VAT rate for customers, resulting in tax inspection and penalty by the tax bureau. Therefore, when choosing a tax agent, the seller must be very careful.

04 Conversion of Flat VAT rate and Standard VAT rate

If you declare total sales of more than ￡230,000 for four consecutive quarters, you will be withdrawn from FRS and the Tax Office will force you to change to Standard VAT from the next quarter. These two tax rates are adjusted It can only be adjusted once a year, If the customer is a Standard VAT, the Flat VAT rate can be adjusted only after four consecutive quarters of declaration and the total sales is less than 150,000 pounds. The customer should apply to the tax bureau 30 days before the next declaration at the latest.

05 Should I choose a lower tax rate?

The Flat VAT rate of 7.5% is much lower than the Standard VAT rate of 20%. but Import VAT and other VAT invoice can not be deducted.Sellers still want to consider the choice according to their actual delivery and sales, suitable for the best.

When your declared value and logistics costs account for what percentage of sales, is it better to use a lower tax rate? Do not prevent to add xiaobian wechat (bestamber_2020) to tell you.

06 Compliance with low tax rates

Many sellers use Double the tax package Logistics, in fact, is not very legal, first, your tax number has no import records, can not prove the source of goods, tax bureau audit time is not easy to explain; Second, there is a risk of the goods being detained during customs clearance. We recommend the seller to use their own EORI and VAT number for customs clearance and delivery every quarter, at least to meet the conditions of low tax rate.

Knowledge is stuck! How does the UK use low tax rates to pay less tax

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