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All You Need to Know About Reseller Tax ID

A reseller tax ID number allows resellers in the United States to purchase products from distributors and wholesalers without the obligation of paying sales tax. The use of a resale number, reseller's license, or reseller's permit is very convenient for anyone participating in the world of online selling and different online selling platforms. However, is this permit available to all sellers from the United Kingdom? Let us give you more information about what you can expect as a UK reseller.

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We'd like to give you a thorough explanation about the supposed 'reseller tax ID number'

Does Your Home Country Have a Reseller Tax ID? Can an Online Seller Get This in the United Kingdom?

Unfortunately, we will have to disappoint some of the sellers who wanted to obtain their own tax numbers. In the United Kingdom, there is no specific digit that is called "reseller tax ID" or the reseller's license.

Be that as it may, if you want to become a top UK reseller, you'd first have to get to know more about the taxation system in the UK and then figure out how to manage a multi-vendor marketplace platform you'd like to use. Regulations about taxes change over time, so every seller needs to keep up with the thresholds and regulations as well as regulations of the best UK marketplace platforms.

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In the UK, you will not get a reseller sales tax ID like you would in the United States

If There Is No Sales Tax Identification Number or a Reseller's Permit, Is There Something Else?

Yes, in the UK, there is a Value Added Tax (VAT) digit that everyone who is reselling goods online needs. It functions a bit differently from the reseller's permit in the United States.

VAT is a consumption tax that is applied to the value added to services and goods at every stage of production and distribution. When your e-commerce business has a turnover that exceeds the VAT threshold, you will need to register for the VAT registration number.

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It is important to know a bit more about taxation policies in order to be a successful seller

Let’s Provide You With the Basic Information About Value Added Tax Registration Number

Discussions about VAT among successful online resale business owners are always difficult since the whole topic is pretty complex. Even accountants have some difficulties understanding and explaining all the intricacies. However, we have a simple explanation that would be enough for every seller in the UK.

The VAT registration number is the identification digit assigned to companies operating internationally within the European Union (EU). It serves as a means for international tax authorities to track and tax the transactions of these companies. It is essential for various administrative procedures.

Since there is a lot that goes into the topic of VAT and the process of getting a certificate from HMRC, here is a video you should watch to get a better understanding.

What Kind of Reseller Will Have to Register for the Value Added Tax Number?

Any e-commerce business that conducts sales of services and goods in countries within the European Union will need this digit. It plays a crucial role in managing the intricate taxation processes within the European Union. 

Also, if you are based in the UK and involved in resale only within the country, but the business's annual turnover subject to VAT exceeds £85,000, then you are required to register as well. However, those resale businesses that operate solely within the United Kingdom, whose turnover doesn't exceed the amount mentioned, only need the standard tax identification number people use domestically.

But, with more online resellers on online selling platforms such as eBay, Depop, Vinted, and Shopify, sellers need to engage in cross-border transactions, meaning that VAT is required. If you fall into this category, you'll need a certificate from HMRC.

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Does anything VAT-related apply to you? If yes, you'll need to obtain a certificate from HMRC

Here’s How to Register for the VAT ID Number for an Owner of a Resale Business and Continue With Your Sales

As a new shoe and sneaker reseller or a regular vintage clothing reseller, if you've discovered that the taxation regulations apply to you, don't postpone the registration. The process is very simple, and there are two ways you can register so as to get a certificate from the HMRC containing your identification digit. Also, keep in mind that it takes about 30 days to get the digit from the HMRC:

  • Online registration: Most people use this method since it is not time-consuming. The first step is to visit the government gateway website. Select the button "register as an organisation." You will then receive forms to fill out; pay attention to the government gateway ID. When you complete the forms, click on "register for HMRC taxes," and then proceed following the instructions.
  • Register via post: If online registration is not your cup of tea, there is always the option of registering via post. You only need to know which form to fill out. There is VAT1A which is for an EU resale business owner who sells in the United Kingdom, and VAT1B is in case you are importing products from another EU country that have a value that exceeds £85,000. You should complete and submit the VAT1C form if you have sold assets for which you have previously claimed refunds based on the 8th or 14th Directive.

After signing the required form, HMRC will issue you a certificate that includes the VAT digit. With this in hand, you can proceed to register for an account online and conveniently file your returns electronically.

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How do I get a reseller tax ID? Instead, learn about getting the certificate from HMRC

Managing Taxes and a Resale Business Will Come Easy When You Rely on a Crossposting Tool

Online selling tools will greatly assist you in the process of managing taxes by providing valuable features that simplify the process of reselling online. The main benefit that cross-listing software can provide you with is a centralized dashboard. 

If you are reselling on multiple online selling platforms, tracking and analyzing the sales will be easy if you only have one inventory. Then, the calculation of taxable income will be effortless. This means that selling software ensures up-to-date and accurate financial information.

Online reseller looking at a phone
Taxes don't have to be a nightmare - use a multichannel listing software to help you

The Crossposting Software That Will Help You the Most Is Zipsale

Since there is no reseller's license or permit but a VAT ID digit, it might seem difficult to navigate the taxation. Start the journey by getting a certificate from HMRC. However, handling taxes in the UK can be simple with Zipsale

This amazing crossposting app will provide you with one inventory for all your stores, whether they are on websites such as Shopify, Depop, eBay, Etsy, or Vinted. Not only will filing returns be easy, but increasing sales across all platforms will bring in new, significant profits. Don't miss out on a chance to use this service to your advantage - register with Zipsale today and get more information on our website.

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