Hi All, I'm entering into negotiations with a former employer to provide back office facilities for one of their business units ( a unit that I used to manage when i was employed with them ), however I need to check out on some tax issues. The business is export, now exporting goods from the UK to NON EU countries is zero-rated tax which is fine, but what I will then be doing is self billing my client with the invoiced sales less distribution fee. What I am a little unsure on is the tax requirement on this transaction. Example. Invoiced Sales ( me to Export customer ) = £1,000 Distribution fee say 10% of sale value = £100 Self Bill to my Jersey based client = £900 As there is zero-rated tax on the £1,000 is there any tax due on the £900 or the £100 ? Stewart
Jersey is also outside of the EU. It appears that VAT is not chargeable on any of these transactions. I'd recommend getting an accountant to look at the whole picture for clarification though. Regards, Gareth
If I set up a small business, how will I know what Tax to pay? What is the difference between VAT and business Tax. The government (UK) website is very confusing. Any simple advice would be appreciated.
Depends largely on how you set up your business. If you set up as being self employed, then you pay three taxes:- - Income Tax on the profits from the business at the marginal rate; - Class 4 National Insurance on the profits of the business; - Class 2 National Insurance at a standard weekly rate. If you set up as a limited company, then pay Corporation on the taxable profits from the business. VAT is a consumption tax in that with the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products.
Thanks for the nice replies....VAT is a consumption tax in that with the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products.