For example: I source the £10,000 worth of products for Company 'A' directly from the factory. Company 'A' pays me £10,000, I pay the factory and arrange the products to be delivered to Company 'A'. I make my money by charging the company 2% more for the items than the factory prices them at. Should I be charging the company VAT and Tax on the items ? or am I just providing a service?
Disclaimer: my business is based in the U.S. with little experience in the UK and EU. But I'm inclined to believe that if you are the entity legally importing the merchandise, you pay VAT. Your client would pay VAT only if the import documents list their name as the consignee. If you only wanted to charge a service of clearing customs and taking possession at the port without VAT liability, you would probably need to be licensed as a customs broker.
Again, I'm not an expert in clearance. A customs broker could better explain it, but I'd bet dollars to donuts I'm on the right track.
Thanks for your question!
Answered 5 years ago