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I'm about to start selling software online and I'm planning to use gumroad for it. (it deals with the card and paypal payment, invoices and deliver of the files)

I was reading the gumroad article about the new EU regulation regarding the VAT taxes.

Does this means you'll be declaring the taxes for us and taken them directly from our customers whenever they pay?

Does this mean we wouldn't even have to become self employed to start earning money legally as there's nothing to declare? (to HMRC in the UK, for example)

Scott
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Alvaro
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1 Answers1

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Yes to the question title, no to the question in the text. Gumroad simply deals with the EU VAT paperwork for you, nothing else. Registering as self-employed, filing taxes with HMRC etc. is all a completely different matter and still needs to be done.

You currently don't need to register to for VAT in the UK unless your VAT taxable turnover is more than £83,000. In the past that was all you needed to do but EU regulation means you must now pay VAT in the country of your consumers, not your country of residence, which can mean a lot of paperwork if your selling across a lot of the EU—this is what Gumroad is saving you from doing.

janpio
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Cai
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  • Forgive me for my lack of knowledge on the topic but isn't VAT the same as the taxes to declare to HMRC? What taxes should I fill with HMRC if there's nothing I'll pay them as gumroad take care of it? – Alvaro Aug 14 '16 at 00:51
  • No, VAT is an extra tax some pay for some things, in addition to your regular taxes. You still need to register for self-assessment and send a tax return every year which will calculate your personal income tax. – Cai Aug 14 '16 at 05:59
  • VAT is normally only paid when your taxable turnover is over £83k whereas you need to send a tax return and pay income tax regardless of how much money you make. – Cai Aug 14 '16 at 06:01