VAT on supply of digital service from another EU country

[ianMD]

One of my UK businesses is not VAT registered but is an LTD; I transact with a Spanish company for digital services that are VAT registered. They've been charging me VAT on their services because they cannot exempt me of that charge because I am not (VAT registered). However, my accountant has stated that regardless, they shouldn't charge me VAT as it is an EU B2B arrangement and should be zero VAT. The supplier doesn't agree.

Who has it right?

[Road2Ruin]

Your supplier is right. He charges VAT and sadly you can't claim it back, unless of course you become VAT registered. You would then have to charge VAT on your goods.

[Eric Mc]

And it all may change on 1 January 2021.

[Simpo Two]

Eric Mc said:

And it all may change on 1 January 2021.

Ah yes, we have that little punch-up to return to once the virus has subsided. 50:50 chance of the can being kicked down the road again...