When clients use our merchant payment services (for example if using our Mobile SDK checkout) then Prodigi becomes the Merchant of Record and establishes the financial relationship directly with the end-consumer.
This means the commercial relationship is direct between the consumer and Prodigi and thus all applicable taxes will be handled by Prodigi. When issuing clients with their share of the profits on any transaction (e.g. Product Selling Price minus the Cost of Goods Supplied) then the self-generated VAT invoices we produce will be subject to the addition of UK VAT at 20%.
Once clients approach or pass the UK VAT threshold of £70,000 then they will need to register for a UK VAT number in order to reclaim the VAT on any invoices.
For transactions in the US, Prodigi adheres to the economic nexus laws once the transaction thresholds for each individual State have been exceeded.
GUIDANCE WARNING: Please note that the above guidelines do not constitute tax, legal, or other professional advice and must not be used as such. It is the sole responsibility of all Prodigi clients to comply with all legal and sales tax requirements for issuing sales tax or VAT invoices in respect to your sales transactions. If you are unsure as to what the contents of an invoice you issue to your customers should be, we suggest that you contact your tax advisor. Prodigi cannot assist you with any legal or tax advice as we’re not accountants or legal experts, and we stress that none of the above may be taken as professional advice.