I know this is off topic, but I feel I must correct the misconceptions some people have about how and who pays and/or keeps VAT revenues in the UK. I do the VAT returns for the small company I work for so know what the procedures are.
Quote:
Originally Posted by Pajamaman
I don't know which I find more shocking, publishers pocketing the value of VAT (i.e. stealing from ebook consumers), or the total lack of mention of it in the mainstream news.
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When VAT in the UK is levied on products the seller of the goods collects the VAT monies on behalf of HMRC (i.e. the tax man). They do
NOT keep it for themselves. Companies with a turnover of more than £85,000 per annum are required to register for VAT with HMRC. These companies then have to make a VAT return either on a monthly or quarterly basis.
When doing this companies have to declare the amount of their sales and the VAT charged against these sales. A VAT registered company can then offset the VAT they paid for their purchases, in the same period, against the amount collected on their sales. They then pay HMRC the difference between the two VAT amounts i.e VAT on sales less VAT on purchases. Obviously HMRC will pay a company if VAT on purchases is greater than that on sales.
Obviously Amazon would not be able to reduce their payments to the publishers for goods already received just as the publishers would have had to pay HMRC the VAT on sales made before the VAT rate was reduced. The removal of VAT on ebook purchases from the publishers really only applied for purchases after the date the reduction in the VAT rate went live.