Commentary

V7.260 Distance selling thresholds

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.260 Distance selling thresholds

Part V7 Tax planning | Commentary

V7.260 Distance selling thresholds

'Distance selling' is the term used for the sale of goods to customers in other EU countries where the customers are not VAT registered and where the supplier is responsible for their delivery. The same principles apply if a supplier in an EU country sells goods to non-registered customers in the UK. The sales in question often relate to mail order or Internet sales.

The sale of goods by a UK business to a non-registered customer in another EU country will be subject to VAT at the same rate as if the goods were sold in the UK. In most cases, the goods will be standard rated although some goods, such as children's clothing and books, will be zero-rated.

The main problem with the above arrangement is that a company could gain a competitive advantage by fixing its main place of business in a country with a relatively low rate of VAT. If a business is a large international mail order company, making sales worth many millions of pounds, then the VAT

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