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Newbie. Why is there tax on my sale?

Discussion in 'Tes Authors' Group' started by Silverwood-Resources, Oct 3, 2019.

  1. Silverwood-Resources

    Silverwood-Resources New commenter

    hi all. I just sold a £1.50 resource to a uk buyer. I understand the 50p royalty and the 20p transaction charges but what is the 25p tax charge about? I can’t find an answer in the TES faq’s.
  2. Silverwood-Resources

    Silverwood-Resources New commenter

    Thinking about it, I don’t even understand the 50p royalty charge given that TEs should, I believe, take 40% and this would therefore be 60p.
  3. tesAuthorTeam

    tesAuthorTeam Administrator Staff Member TES Authors' forum host

    The relevant FAQs around VAT can be found here: https://www.tes.com/help/tax-and-vat-faq#faq-section-1
    Further details explaining various deductions can be found here: https://www.tes.com/help/selling-resources-faq#faq-section-2

    In brief:

    Sales tax (called Value Added Tax - VAT in the UK) is a legal requirement to be deducted from the sale price at point of payment. Tes is required to make this deduction from your listed sale price of the item.

    Because this is 'value added', on a UK purchase it is calculated at 20% on top of the product value, meaning that it is 1/6 of the total listed price (the percentage varies dependent on buyer country location). This is the amount we deduct for VAT. This is the system used by shops and retailers across the UK unless they advertise that sales tax is not included in the list price (in which case a buyer gets the shock of an extra amount at checkout - this discourages people from completing purchases). After that deduction has been made we then make the royalty calculation on the remaining value of the resource. If the resource is priced under £3 we deduct a further 20p to cover costs that our platform has to pay on the transactions.

    Please read through the FAQ sections linked above if any of this explanation is unclear.

    Disclaimer: this is not financial advice or written by a finance expert and is only designed to exemplify for explanation of the current question.


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