9 {{ upvoteCount | shortNum }}
9 {{ upvoteCount | shortNum }}

Clickbank and VAT (UK)

by strawb49
8 replies
I'm in the process of setting up my first Clickbank product. I'm based in the UK and I see that VAT is automatically added to purchases within the EU. My income is below the legal VAT threshold, so I don't need to be VAT Registered and as far as I'm aware I'm not legally required to charge VAT.

My question is, will the price my customers pay including the VAT be processed as one, or will the VAT portion be taken out and sent to HMRC?

If the tax portion is diverted, then would that mean I'd effectively end up paying tax on the sale twice (as the revenue will still need to be on my tax return), which doesn't seem right...?


Another issue could be that the total sale price to customers would be different for people from different countries, which could make it tricky to display the correct total price on the pitch page.

If that's the case, how do sellers get around this? Is it better to list the price in $ US? (Most of my customers are UK based, however and I'm worried this could be off-putting for them.)



Thanks in advance guys.
#clickbank #vat
  • Profile picture of the author SunilTanna
    My layman's understanding is as follows:

    1. You are selling to ClickBank

    2. ClickBank is selling to the end-user


    You set/suggest (subject to CB's rules, etc.) price for transaction 2. CB then adds VAT. Sales Tax, etc. when *they* sell to the end-user, if *they* are required to do. They remit the taxes they are required to pay the relevant authorities.

    Your sale to CB is separate. It is for less than price 2 - take away $1 + 7.5% to get the value of your sale to CB.

    CB is in the USA, so my understanding is VAT does not apply to transaction 1.

    Of course, always consult a professional advisor on all tax matters.
    Signature
    ClickBank Vendor?
    - Protect Your Thank You Pages & Downloads
    - Give Your Affiliates Multiple Landing Pages (Video Demo)
    - Killer Graphics for Your Site
    SPECIAL WSO PRICES FOR WARRIORS + GET THE "CLICKBANK DISCOUNT" TOO!
    {{ DiscussionBoard.errors[10294192].message }}
  • Profile picture of the author strawb49
    Thanks Sunil, I think I'm starting to get my head around it all now. :-)
    {{ DiscussionBoard.errors[10294616].message }}
  • Profile picture of the author julesw
    btw You do need to charge VAT if you sell to from UK to EU regardless of the threshold ...

    new rules came out

    New EU VAT regulations could threaten micro-businesses | Guardian Small Business Network | The Guardian
    Signature
    WIN my Lanparte Smartphone or GoPro Gimbal! Get Ready Get Steady! Watch my Video Here:
    VideoHero.com/win
    {{ DiscussionBoard.errors[10295479].message }}
  • Profile picture of the author strawb49
    Thanks Julesw and Tweetpilot

    I guess one of the good things about using CB is that it takes care of the local taxes.

    So I now need to look at how to align the price my affiliates offer with the price on my own site where people join via paypal subscription.

    One option I can think of is to only offer UK sign-ups via my own site (so there's no VAT involved) and direct people from elsewhere to a Clickbank page.

    On the other hand I could just keep it simple and get rid of my paypal sign up page and run all sales through Clickbank, but then I'd lose 20% of the price (VAT) plus Clickbank fees.

    Any thoughts on the best approach?
    {{ DiscussionBoard.errors[10300817].message }}
    • Profile picture of the author Sid Hale
      I'm not in the EU, so maybe I'm all wet but...

      Originally Posted by strawb49 View Post

      On the other hand I could just keep it simple and get rid of my paypal sign up page and run all sales through Clickbank, [/u]but then I'd lose 20% of the price (VAT)[/u] plus Clickbank fees.
      I don't understand why sales through CB would be costing you an additional 20%?

      VAT should not affect you in any way with CB. They are the merchant, and they should be adding VAT onto the sales price for any EU sales.

      VAT is a tax on the consumer, that the vendor (CB) is obliged to collect on behalf of the EU, and subsequently remit to the EU taxing authorities.

      In other words, you should be receiving your sales price, less any commissions and processing fees. YOU are under NO obligation to collect VAT, but CB is obligated and it should be listed as a separate, additional, fee at checkout time by CB.

      You wouldn't be taxed on the amount at all. You didn't sell anything - CB did.
      Signature

      Sid Hale
      Coming Soon... Rapid Action Profits (Pro)

      {{ DiscussionBoard.errors[10301381].message }}

Trending Topics