Financing, tax rates, and accounting
Hi
I have a business that is VAT registered. If I dropship can someone tell me where the VAT applies?
eg
I have a product listed which is wholesale £40
I sell it for £100
Does VAT apply on the £100 total cost, or the £60 profit?
If it's the total cost - would I get VAT relief on the wholesale price?
HI Lisa,
VAT always applies to the sales price , unless you are on VAT margin scheme (it cannot be supported by Shopify), so you charge VAT on 100 GBP in your store . The question is where do you dropship from . If you dropship from within UK you can claim input VAT on your purchase (on 40 GBP) , so you end up paying VAT on the profit (60 GBP) . If you dropship from abroad to the UK you will pay VAT on 100GBP
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