GST on UK Online Sales to Australia

No Extra GST on UK Online Sales to Australia?.

UK online retailers already charge tax at 20%, called VAT in the UK.

Future sales to Australia means that these retailers need to pay 10% GST to the Australian Tax Office (ATO).

Many UK retailers are saying they will absorb the GST on sales to Australia, which is actually easy for them, as many collect twice as much already. They are easily able to absorb the 10% payable to the ATO for each sale.

An example of how this has been working might be:

  • A product that is sold for 120.00 in the UK has that sale price split with 20 going to the UK tax office, and the retailer keeping 100.00.  (Sale price 100.00 + 20% VAT)
  • A product that is sold for 120.00 to Australia has had nothing going to the UK tax office, and nothing going to the Australian Tax Office, so the retailer kept 120.00.
  • From 1st July 2018, the split on a 120.00 sale will be 10.90 to the ATO, and the retailer keeping 109.10. (Sale price 109.10 + 10% GST)

There is no need for them to itemise the tax, so we don’t actually see the breakdown.

It is better for the UK retailer to say they will absorb the GST, instead of saying they have been charging 20% over the last few years.

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There may be exceptions to this with some UK retailers not actually charging the normal UK retail price to overseas customers.  This can be seen on their websites where the price to locals is 20% higher than prices quoted to Australian customers.

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