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How do you handle VAT?
Anyone here running small web tools? How do you handle VAT?
Hey everyone,
Just curious — are any of you running small websites or tools that serve a specific function (like calculators, converters, or micro SaaS projects)?
I’ve recently launched a basic tool focused on VAT-related calculations in the UK, and it's got me thinking… how do other small devs or solo builders deal with VAT?
A few things I’d love to get your take on:
Do you charge VAT or keep it simple until you hit the threshold?
How do you handle VAT with EU vs. non-EU users?
Are you using any simple billing systems that make VAT compliance easier?
I know a lot of folks here are into lightweight setups and lean businesses—I would love to hear how you balance legal compliance with keeping things simple.
Comments
I have a SaaS and located inside EU. I only charge VAT for EU customers. Business customers with valid VAT number get 0% (reverse charge). Other EU customers 21%.
My SaaS is connected with my online accounting system which handles all the EU tax and does the reporting to the tax authorities.
hmm, I think you can look for "merchant of record" providers. eg: https://gumroad.com/
I just wait for the knock on the door. It can't be simpler than this.
Just do ihostart accounting and don't think about VAT.
How much VAT for 22k in BTC? Asking for a friend.
2 ladyboys and photo with them
In Poland, the VAT aspect is depending on various of conditions,
either You can be on a VAT relief till You hit a specific yearly income threshold.
Then, You may register to "VAT-OSS" - then You're paying 23% for B2B/B2C transactions within Poland, country VAT rate for other EU-countries, and 0%/revcharge for customers with valid VATID / from other countries. As far as I know, You can also avoid registration to vatoss under some circumstances - but then You should charge 23% rate.
Thanks for sharing that! It’s really interesting how VAT works differently across the EU. I’m based in the UK and recently launched a simple tool for UK-specific VAT calculations: https://vatcalculatorz.co.uk.
I'm still in the early days, so I haven’t registered for VAT yet, but I'm planning ahead for when I hit the threshold. I’m also exploring VAT-OSS and other options for handling EU vs. non-EU transactions.
Would love to hear if you or others are using any billing systems that make this smoother!
UK company here. For domestic we apply the 20% rate on top of invoices, and for EU we apply the country specific rate unless the customer provides their VAT number, in which case we charge no VAT and apply the reverse charge mechanism. We then just have a bank rule in xero to match transactions to a vat rate and generate a quarterly report.
Couple of important things to note:
Disclaimer: this is oversimplifying a lot and is not legal or financial advice and if you are actually looking to implement vat you should consult a solicitor or accountant.
For me, definitely this.
My current clients are in the US at the moment, so I don't charge them VAT anyway.
Despite this, I've probably paid on average about £1000 in VAT per year that I could have saved if I was VAT registered. Mostly, they're assets, so in theory I still could claim a big chunk back if I registered now (there's a 4 year limit on claiming VAT back from goods purchases before registration), but it still doesn't seem worth the cost for me.
A friend who's a partner at a fairly big accountancy firm told me they charge £750 per quarter minimum for handling VAT. I've gone with a smaller accountancy firm, who I'm quote happy with which charges a fixed £1000+VAT per year, but if I wanted VAT as well, they'd want to move me to their £250+VAT per month plan instead. That'd actually includes things like PAYE which I do myself (it's pretty trivial for just paying yourself), but it's still a big jump in price just to reclaim a little bit in tax, and it wouldn't break even for me.
In the future, I will have more UK based clients, but will still put off VAT registration as long as possible, and as the current threshold is £90,000 per year on VAT-chargeable income, I'd have to gain a significant UK client-base for that to be significant. By the time that happens, I'll probably be employing another couple of people anyway, so the increase in accountancy costs is likely to be less of an issue.
Obviously, the biggest benefit in not charging VAT if you don't have to is that your product becomes more appealing to customers who aren't VAT registered themselves, because you should be able to be cheaper than the larger competition. Obviously, that doesn't help if your clients are VAT-registered themselves, but depending on your market that price advantage could be a significant help.
I'm not sure how you'd deal with the situation of transitioning such customers from non-VAT registered to VAT-registered, if they suddenly have to pay more. If your customers are predominantly non-business and sensitive to price, it's possible you might just have to take the hit and absorb the extra 20% yourself from your profit margin.
That's interesting. I was under the impression that UK-based companies selling directly into EU were now required to register for VAT, either in each country separately or under the EU umbrella pseudo-country, regardless of sales volume.
I think that's why a lot of card handlers offer merchant of record services so that you don't have to deal with all this stuff yourself.
This is correct - per my first point there is no threshold, so you should be charging and remitting VAT on any sale to the EU. But if you are not registered for VAT OSS or in the EU memberstate in question, you legally cannot charge VAT. Provided it's the same quarter, you can still register for VAT and backpay the amount you should have (VAT is ALWAYS due), you just can't charge it onto the customer.
Thanks for the detailed explanation—this clears up a lot, especially around OSS and backpaying VAT within the same quarter. I didn’t realize that you legally can’t charge VAT without being registered first, even though it’s still due.
To make things easier on my end, I started using this free UK & EU VAT calculator that helps break down the numbers clearly. It's a simple tool, but really effective for double-checking VAT amounts on cross-border sales, especially when you're working with multiple regions.
Would love to know if anyone else is using a tool or software to handle VAT tracking and calculation?
OP good luck with your tool. I can't see any reason why a user would pick your site over the thousands already out there. But it doesn't have to be like that. It'll be tough to start but you can become the go to vat resource if you have enough interest.
Try and think about how you differentiate and the search traffic will come if you're offering something actually valuable. Guides, extra calculators, more FAQs, a forum in the future that sort of thing.
I would suggest removing the link to your tool @Emma343. Mods really should have already. Otherwise it looks like you've just joined to shill your tool...
Keep it simple until you hit the threshold - why complicate your accounts and returns?
What is it, if you don't mind sharing?
No VAT for PTRDNS unless I go over the thresholds defined by the French government, the invoices need to mention the exemption under
art. 293 B du CGI.Can be worthwhile to register if you have VAT registered suppliers, as you can then reclaim VAT charged to you by them. Granted, the trade off is you then have to start charging your customers VAT as well.
I don't really see the extra work for paperwork as a downside - if you're running a business you should really either be paying an accountant to do it for you, or be willing to put in the time to do everything properly. In the UK, VAT is also incredibly easy to file. Xero gets a feed of all my transactions from stripe & supplier invoices from bank feed or peppol, and it generates the return automatically & lets me submit it to hmrc with one click.
Are you referring to UK to UK sales? ( I presume from your post )
Can you be more specific? to what relations are you referring???
UK to UK
UK to EU
EU to EU
EU to USA
Specific EU countries to UK
i can go on for hours....
This will be 50 pages of very confusing stuff that ultimately will be worthless unless you ask your question a bit more specifically.
This is Country Dependent just you know, so we have 27 in the EU, I wish to see 27 reply what is the limit that you have to pass to be VAT payer in your country?
Depends, is the question related to a EU incorporated VAT paying Entity toward EU and non-EU Customers and companies?
All of them know how to do this ( commercial ones, I have no clue what free stuff does nor I care ), if you set it up correctly.
aaaaaa, by reading how it is treated by destination country you wish to do business??? heck, GPT will throw up a ~80% correct answer in .7 seconds.
I also highly urge startups to consult an accountant in their own country when using an LLC for invoicing abroad. Misunderstanding the rules or misconfiguring your setup can lead to hefty fines down the line — especially in the EU, where VAT-registered companies are required to declare VAT collected or paid to/from EU-based LLCs and individuals. This reporting can be monthly or quarterly, depending on the country.
I have a feeling you do not understand how VAT works ( please do not take this personally, you are not the only one ) and until you do, do not create an app for that as it will be...... well trash.
Hire an accountant and use some basic software. Cheap and saves you a whole lot of headache now ,
and in the future.
Paperwork sucks, I don't mind paying someone who actually enjoys hell.