What Is a Reseller Permit in the UK?
Sometimes, the legal issues seem too challenging, and online resellers get lost in all the complexities of tax laws, regulations, and certificates required to keep businesses afloat. The frequent question arises — what is a reseller permit in the UK? Is there such a thing as a license or certificate for a resale business? We've got the answers.
What is a Reseller Permit?
The good news is that there is no specific reseller license for online resellers in the United Kingdom. The closest equivalent is a VAT (Value Added Tax) registration. Whether you're a clothing reseller online or a shoe reseller with an online store, you must register for VAT if the taxable turnover surpasses a particular threshold.
This registration allows a seller to claim the VAT paid on business-related purchases, making the process of selling goods online more financially stable.
On the other hand, there are reseller permits, known in the United States as resale certificates. It is a state-issued document that allows registered businesses to purchase goods intended for resale without having to pay sales tax.
What is a Reseller Permit Number?
In the UK, there isn't a particular reseller permit number since there is no resale license per se. Instead, businesses that are involved in reselling, such as an online second-hand store, would need a unique VAT number after registering for VAT.
The VAT number serves a simple purpose - it allows businesses to claim VAT on their purchases and charge VAT to their buyers. On the other hand, in the USA, a reseller permit number is issued to businesses that qualify for tax-exempt purchases of items intended for resale. It's given on the certificate that serves as a license.
How Much Does a Reseller Permit Cost?
In the context of the United Kingdom, we'll talk about the VAT registration. It's important to underline that there is no cost associated with this registration. When a reseller reaches the taxable turnover threshold, registration for VAT is necessary. So, remember that the registration is free of charge. The state-issued reseller permits required in the USA aren't always for free, and the exact cost varies by state.
How to Obtain a Reseller Permit?
Do you wish to know how to get a reseller permit? Since in the UK, a seller can only go through VAT registration, the most important thing is to apply to HMRC (HM Revenue and Customs). The best thing about this process is that it can be completed using the government's official website.
The seller is required to provide information about the business, including company information and number of sales. Keep in mind that you will be registering for self-assessment, so make sure to fill in the correct details about your new e-commerce business.
For anyone wanting to open an Internet shop right now and offer items for purchase, here is a video to watch.
Who Do You Need to Contact?
If you need to learn how to fill out the self-assessment form on the government's website, contact the HMRC directly. For any additional information, questions, and assistance, reach out to their helpline or online services or contact them through post. They can provide guidance and clarify any doubts about VAT-related obligations.
Do You Need a Business License For Casual Online Resale?
When trying out casual online resale, such as selling used items from your garage for fun, it's often considered a hobby rather than a full-blown business. In case the sales are low and the income minimal, worrying about taxes is out of the question.
Individuals who dip their toes into the second-hand market on platforms such as Etsy or eBay don't need any kind of certificate if their operations are small-scale. In case the volume of sales increases to the point where it's obvious it's not just a hobby, check with HMRC.
Where Can One Get Up-To-Date Information on Permits and Tax Expenses for Online Sales?
If you need any relevant information pertaining to expenses for taxes and permits for online sales, turn to the GOV.uk website. Here, a seller can learn all about VAT registration, tax duties, and additional licenses that might be required for conducting online commerce worldwide. Use resources available at the British Business Bank about these topics if you are newer to any multi-vendor marketplace platform, such as:
Resellers in the United States can gain more information on a needed certificate and taxes about the same topics from their state governments.
What Are Your Tax Obligations for Online Sales?
Once your total sales go over the VAT threshold, which is £85,000 in a 12-month rolling period as of the last update, VAT needs to be paid. This entails charging VAT to customers at the appropriate rate for your products, which is 20% for most goods and services.
Returns for taxes need to be submitted, usually quarterly, and paid to the HMRC. It's important to regularly check the threshold on the GOV.uk website, as it can change. For corporate entities, you're required to pay Corporation Tax on profits, and the rate as of the last update is 19%.
Success Is Guaranteed With Zipsale - The Best Crossposting Software
Are you new to the world of online marketplace platforms? In case you are just starting and dreaming about the possibility of owning a successful e-commerce business, we recommend that you use the most trustworthy software for selling online - Zipsale. It allows resellers to offer their goods on as many as seven marketplaces.
Not only is it possible to reach a wider customer base, but this cross-listing software takes the load off your shoulders by keeping track of orders for you. Instead of manually canceling sold-out items, the multichannel listing software delists them for you. With a crossposting app, buyers will purchase your goods. So, use it by registering now.