Europeans that won't knock the VAT off
Discussion
Just a bit of a rant really, does anyone else come across this?
If one VAT reg business in the UK buys from another VAT reg business in the EU then there should be no VAT applied, yet some refuse to remove it, it really pisses me off!
Hopefully Brexit will see an end to this.
If one VAT reg business in the UK buys from another VAT reg business in the EU then there should be no VAT applied, yet some refuse to remove it, it really pisses me off!
Hopefully Brexit will see an end to this.
Edited by 227bhp on Saturday 5th October 14:21
Nope. The first paragraph is not ambiguous.
If you are a UK VAT registered entity and you are buying goods from a business based in another EU country and they are VAT registered in that country, once you provide them with your UK VAT number, they should Zero Rate the invoice they produce covering the sale of the goods to you.
When you are completing your own UK VAT return, you actually declare in your "Output VAT" box on the return, the VAT that WOULD have been charged by the supplier if they had been a UK VAT registered business. However, you also show this VAT amount as part of your "Input VAT" reclaim - so effectively, the VAT declared is immediately cancelled by the VAT reclaimed.
You might say "What the hell is that about?". And you would have a point.
When the single market came into existence in 1993, sales of goods and services between different EU countries were no longer described as "Exports" or "Imports". They were now deemed to be "Intra-State Transactions". No more customs declarations were required as a consequence for these transactions. However, that meant that the UK government would have lost a significant piece of data regarding Imports and Exports and balance of payments surpluses or deficits.
By making traders include the Intra-EU transactions on their VAT returns, they got the data through a new method.
Of course, this will all be blown up by Brexit. I presume after Brexit sales and purchases to businesses based in EU countries will revert to being normal imports and exports like in the "good old days", with all the required additional paperwork (or electronic equivalent).
If you are a UK VAT registered entity and you are buying goods from a business based in another EU country and they are VAT registered in that country, once you provide them with your UK VAT number, they should Zero Rate the invoice they produce covering the sale of the goods to you.
When you are completing your own UK VAT return, you actually declare in your "Output VAT" box on the return, the VAT that WOULD have been charged by the supplier if they had been a UK VAT registered business. However, you also show this VAT amount as part of your "Input VAT" reclaim - so effectively, the VAT declared is immediately cancelled by the VAT reclaimed.
You might say "What the hell is that about?". And you would have a point.
When the single market came into existence in 1993, sales of goods and services between different EU countries were no longer described as "Exports" or "Imports". They were now deemed to be "Intra-State Transactions". No more customs declarations were required as a consequence for these transactions. However, that meant that the UK government would have lost a significant piece of data regarding Imports and Exports and balance of payments surpluses or deficits.
By making traders include the Intra-EU transactions on their VAT returns, they got the data through a new method.
Of course, this will all be blown up by Brexit. I presume after Brexit sales and purchases to businesses based in EU countries will revert to being normal imports and exports like in the "good old days", with all the required additional paperwork (or electronic equivalent).
Eric Mc said:
Nope. The first paragraph is not ambiguous.
If you are a UK VAT registered entity and you are buying goods from a business based in another EU country and they are VAT registered in that country, once you provide them with your UK VAT number, they should Zero Rate the invoice they produce covering the sale of the goods to you.
When you are completing your own UK VAT return, you actually declare in your "Output VAT" box on the return, the VAT that WOULD have been charged by the supplier if they had been a UK VAT registered business. However, you also show this VAT amount as part of your "Input VAT" reclaim - so effectively, the VAT declared is immediately cancelled by the VAT reclaimed.
That's the way I usually do it and in fact have just this moment ordered something from the E.U.If you are a UK VAT registered entity and you are buying goods from a business based in another EU country and they are VAT registered in that country, once you provide them with your UK VAT number, they should Zero Rate the invoice they produce covering the sale of the goods to you.
When you are completing your own UK VAT return, you actually declare in your "Output VAT" box on the return, the VAT that WOULD have been charged by the supplier if they had been a UK VAT registered business. However, you also show this VAT amount as part of your "Input VAT" reclaim - so effectively, the VAT declared is immediately cancelled by the VAT reclaimed.
where the (German) company have written that my order is ".... exempt from turnover tax".
The Output VAT and the Input VAT reclaim should to be based on the Sterling equivalent using HMRC's 'Period Rate of Exchange'.
But to a layman in tax matters, I still say that their first paragraph seems ambiguous..
Gassing Station | Business | Top of Page | What's New | My Stuff