ALIEXPRESS DROPSHIPPING ACCOUNANTS GUIDE

ALIEXPRESS DROPSHIPPING GUIDE

If you wish to do an e-commerce business where you don’t have to worry about inventory or shipping issues, then dropshipping is the best way to go.

Get a Quote Now

Dropshipping is a straightforward business where you can list the products for online sales and send an email to ask your supplier to directly despatch the product to the customer on your behalf whenever you get the order. It is as simple as that.

Dropshipping may appear to be the easiest way to start an online business on e-commerce sites, but you may find it challenging to search for dependable suppliers. You may have to dig deeper online to find such reliable suppliers. You can choose from millions of items for online sales from the AliExpress site for your dropshipping business.

WHAT IS ALIEXPRESS?

AliExpress is a huge e-commerce portal where you have a choice for millions of different products. The suppliers of these products offer competitive prices on AliExpress because most of them manufacture their products overseas. You can get all the products under one roof. The range of products on AliExpress has a wide variety, including women’s clothing, electronic items, jewelry, home and so on. If you have already decided to sell products through e-commerce, AliExpress is an excellent source for supplying a comprehensive range of products.

WHAT IS ALIEXPRESS DROPSHIPPING?

If you wish to do an online business where you don’t want to worry about inventory or shipping problems, then AliExpress can help find the products you want to sell on your e-store. You can choose the product you wish to sell from the AliExpress site and add them to your store. You are free to decide your sales price by adding your profit margin. As soon as you receive an order, AliExpress immediately despatches the product to your customers, and you will only pay the wholesale price for that product.

WHY ALIEXPRESS FOR DROPSHIPPING? AliExpress can also work as an online retailer, but most sellers on this platform know very well that many of their customers are resellers. Those resellers want to sell products through dropshipping. Secondly, the dropshipping business is relatively more straightforward through the AliExpress platform. Since it does not charge you anything upfront, you can take a calculated risk by choosing any products. The financial commitment, in that case, will not be significant. You can start the dropshipping business today itself with only a view clicks through Oberlo. It helps you quickly find the products you want to sell and add them to your online store.

ACCOUNTING SERVICES FOR DROPSHIPPING

Any company engaged in the online sales of products which is a registered limited company needs accounting services as follows: abbreviated accounting and statutory accounting for the company.

Corporation tax including CT 600

The statement regarding compliance with payroll and pension requirements

A self-assessment return for Director’s tax

Filing of VAT returns along with bookkeeping every quarter

Statement of confirmation

TIPS ON CLAIMING ALLOWABLE EXPENSES FOR E-COMMERCE BUSINESS

Please find below a few of the top tips to claim the expenses incurred for an online e-commerce business:

You should ensure to maintain a proper record of all the costs incurred in the e-commerce business.

You can claim the expenses of hiring a professional accountant or using accounting software as a business expense in these three categories: Tax preparation expenses, tax filing expenses, and accounting expenses.

The claim of travel expenses includes the costs incurred by either the business owner or its staff to travel for sourcing products or deliver the products to the post office or the courier office.

You can include courier charges and taxes for your sales in the shipping cost.

You can claim internet service expenses, computer systems, stationery expenses, furniture, and other such expenses as office expenses.

In the manufacturing of products, you may include all the expenses to manufacture, e.g., raw material, tools, and cost of other supplies.

If you use some portion of your house exclusively as a home office, you can claim a deduction for the home office.

The business owner can also claim damaged or returned products as expenses. For this purpose, the owner needs to maintain the records of opening and closing stocks for the financial year.

The expenses also include e-commerce charges, bank charges, PayPal fee, postage expenses, and reselling related costs

GM Professional Accountants are located in London,  Manchester and Birmingham.

Accountants Guide for WRITERS AND AUTHORS

ACCOUNTING SERVICES FOR WRITERS AND AUTHORS

We have specialist accountants who can submit accounts for writers and authors to HMRC. We provide accounting services for full-time writers and even for occasional writers. We do our best to learn about their account status and optimize their tax liabilities.

Get a Quote Now

The foremost question to answer is whether you are employed or not. You are most probably self-employed if you are not working for publishers or news companies directly.

Our tax experts team will find out whether they can consider your income from self-employment as a trading income or not. The team handles your account directly to ensure that if any tax payment is due. They pay due taxes two times in a year by choosing the self-assessment system of tax payments.

In case you work as a writer or author for an employer, our team ensures that your employer correctly deducts taxes at the source. Moreover, if you have several income sources, our tax experts help you in declaring them correctly.

If you handle many contracts in the UK and abroad, we depute a dedicated accountant to manage the accounting activities. The team also ensures two essential things: secure payment of due taxes by optimizing the tax payments and ultimately ensuring that you comply with the taxation laws. Nobody would ever like to get into HMRC investigation problems. However, it is quite possible to put yourself into trouble because the UK taxation laws are too complicated. We work intending to provide peace of mind to our clients.

HOW TO WORK OUT YOUR TAXES?

If you are working as a writer, you may have several income sources. They may include the income from writing books or writing ad-hoc articles, or even copywriting, and we account for all of those income sources. It is vital to understand that HMRC wants to classify taxpayers rightly as employed or self-employed. Our tax experts help you register in the correct category since HMRC has clearly defined the precise rules to determine the right position.

In rare cases, some writers and authors fall under the category of “Reserved Trading Income Status,” which they earlier referred to as “Reserved Schedule D Status.” They will be deemed self-employed and will continue to be taxed accordingly to discharge tax payments properly by ensuring no possibility of any employment break.

THE ALLOWABLE EXPENSES FOR WRITERS AND AUTHORS TO CLAIM?

An Expense refers to something essential to operate the business. Below is a list of allowable tax deductions for writers and authors from their tax liabilities.

* · MARKETING COSTS – Business cards, reprints of your work
* · WEBSITE COSTS – Hosting a website and maintaining it to promote your working
* · TRAVELING EXPENSES – Train tickets, petrol costs, etc
* · ACCOMMODATION – Hotel expenses for overnight stays for business purposes
* · COMPUTING EQUIPMENT – Laptops, printers, and editing software
* · INSURANCE FOR THE ABOVE COMPUTING EQUIPMENT – To protect your livelihood
* · COMMISSIONS – Fees paid to literary agents

For a self-employed person who works from home, we can suggest to include household expenses which you can attribute to your business. Those costs include fees for heating, phone service charges, a room used as your office, etc.

DOUBLE TAXATION AGREEMENTS

The UK government has double taxation agreements with several other countries. As a taxpayer, it is your responsibility to optimize the taxes payable in those countries. We provide guidance and assistance to authors and writers for avoiding double taxation. If you do not prevent or reduce your taxes in time, HMRC can refuse to give any relief later. Our expert team ensures that such a situation never arises.

If the other country does not fall under the double taxation ambit, we suggest you ensure full compliance and thereby help you avoid excess tax payments.

THE COMMON PITFALLS

Taxpayers usually make a common mistake of showing income net of VAT or any commission to agents. It is a wring practice. You should always declare gross income and show such commission and VAT expenses separately and claim as a deduction from such income.

Last year, we detected a new type of problem of new cash basis. HMRC referred to it as simplified expenses. If you opt for this, you cannot set-off losses against other income and limit some claims to costs. The earning basis provides more flexibility, which implies that you declare the income as earned instead of received and declare the costs as incurred instead of paid.

BREXIT E-COMMERCE AMAZON CHANGES

POST BREXIT SCENARIO FOR SELLING GOODS ON AMAZON

Amazon’s July communication is a reminder to its merchants regarding the Brexit legislation regarding change of the fulfillment conditions. The Brexit policy and its effects are not the topmost priority on Amazon sellers’ minds, but it is high time that they must do something about this changeover and work out the options before them.

Contact us now

What changes are coming for the E-commerce businesses

The United Kingdom decided to exit the European Union officially and is approaching the fag end of this transition. Consequently, we will see a dramatic shift in the UK and the EU’s business activities after December 2020. Amazon has begun to inform the merchants about the actions needed to make necessary adjustments per their FBA (Fulfilled by Amazon) program.

Brexit VAT
Brexit VAT

There are many repercussions of this Brexit related notice of Amazon. We have analyzed Amazon’s communication on 14 Jul 2020 to understand its exact business implications. We have also tried to address cross-border sales and chalk out the steps after completing the Brexit transition.

The EFN (European Fulfilment Network) of the UK & the EU will not work anymore.

If you served your customers with the help of the EFN, it might not be possible to continue with it, both from the EU to the UK or the other way round.

UK’s fulfillment Brexit changes

Hence, you will not be able to send your products from the UK’s fulfillment center to EU countries. You can not work under the EFN system, and you will need VAT registration in the respective EU countries. Previously, the local fulfillment center shipments were eligible for the local VAT with a threshold of annual distance-based slabs.

In the same way, if you intend to target the UK consumers by using an EU fulfillment center, you cannot do that from the EU now, and you will have to keep products in an Amazon fulfillment center in the UK with VAT registration.

The UK shall cease to be part of a pan EU program anymore.

Earlier with the pan EU program’s help, the sellers could service customers of the EU with quick delivery

schedules. After excluding the UK from these countries, it will have new business implications.

A merchant cannot use a UK fulfillment center to retail the goods in the EU market. Hence, Amazon has made it clear that the merchants will use the other six EU countries to reach the EU market.

These changes could have a cascading effect on your supply-side logistics. Like EFN, the merchants will have to bring goods to the UK or EU or the other way to reach UK markets. There will be a potential surge in your logistics costs, and you will be required to manage your inventories in several jurisdictions. Besides, you will pay VAT on imports twice. However, you can reclaim the import VAT by filing the tax returns.

The requirement of fiscal reps for VAT registration of your UK business

Fiscal reps are local units jointly or severally responsible for VAT payable to a business that is non-EU based. It will ensure compliance with VAT norms for business based outside the EU.

Our Amazon accountants have analysed that the pre-Brexit era meant no need for any fiscal reps. But post-Brexit, you may have to engage fiscal representatives in Italy and Poland. It has additional cost implications for the merchants, and they did not consider that while measuring market attractiveness.

A second EORI code is mandatory for bringing products to the EU.

EORI stands for Economic Order Registration Identification. It is an identification number for traders importing to the EU and the UK and also enables them to claim taxes from the country of VAT registration. A GB EORI code is required to import products all over the EU. It is valid until Dec 2020. With effect from 31 Dec of this year, no merchant can use the GB EORI code to bring goods into the EU. They will stop accepting your GB EORI code from 2021. The merchants will need to get a secondary EU EORI code.

Similarly, This mandatory requirement holds the other way round as well; if a merchant were working with EU EORI codes, you would have to get a GB EORI codes to begin to bring goods in the UK area.