VAT from Ebay ?
Discussion
Hi all - I place advertising for some of my clients (motor dealers) on Ebay Motrs Pro. For some I also run Google Adword campaigns. Both of these produce invoices from outside the UK - Ebay from Luxembourg, Google from Ireland.
The invoices do not contain VAT but include statements that it is my responsibility to account for VAt according to my countrys' VAT laws.
So when I recharge my clients do I add VAT at 17.5% to what I have paid for the services e.g. I pay £1000, do I now charge £1000 +VAT at 17.5% i.e. £1175 ? Even though I haven't paid any VAT ?
The invoices do not contain VAT but include statements that it is my responsibility to account for VAt according to my countrys' VAT laws.
So when I recharge my clients do I add VAT at 17.5% to what I have paid for the services e.g. I pay £1000, do I now charge £1000 +VAT at 17.5% i.e. £1175 ? Even though I haven't paid any VAT ?
Eric will correct me if I am wrong, but I believe the short answer is Yes you do add VAT to these costs when you charge your client.
The long answer is buried in the VAT Guide (VAT700).
I am in a similar situation and I phoned HMCE to check what to do, and they said add VAT. They even told me to add VAT even when the thing I am invoicing for is exempt VAT, like Airfares.
Simon
The long answer is buried in the VAT Guide (VAT700).
I am in a similar situation and I phoned HMCE to check what to do, and they said add VAT. They even told me to add VAT even when the thing I am invoicing for is exempt VAT, like Airfares.
Simon
When supplying SERVICES to overseas customers, the key factor is WHERE the services are supplied.
If you are based in the UK and supplying the service here in the UK (even though the customer is abroad) you should be charging VAT on your invoices.
Of course, things are not so straightforward.
If your customer is EU based and is VAT registered in THEIR EU country, you can Zero Rate your invoice - but only if they can supply you with THEIR valid VAT registration number. If they are not VAT registered, you MUST charge them UK VAT.
If they are based in a non-UK country, you MUST charge them UK VAT.
The point about whether you should charge VAT on train and air fares is valid for ALL your customers whether they are based in the UK or not. The train companies and airlines have special dispensation (as public transport providers) to exempt their income from VAT.
If you are merely re-charging those plane and train fares to your customers, you cannot make use of these VAT Exempt dispensations as they are industry specific.
If you are based in the UK and supplying the service here in the UK (even though the customer is abroad) you should be charging VAT on your invoices.
Of course, things are not so straightforward.
If your customer is EU based and is VAT registered in THEIR EU country, you can Zero Rate your invoice - but only if they can supply you with THEIR valid VAT registration number. If they are not VAT registered, you MUST charge them UK VAT.
If they are based in a non-UK country, you MUST charge them UK VAT.
The point about whether you should charge VAT on train and air fares is valid for ALL your customers whether they are based in the UK or not. The train companies and airlines have special dispensation (as public transport providers) to exempt their income from VAT.
If you are merely re-charging those plane and train fares to your customers, you cannot make use of these VAT Exempt dispensations as they are industry specific.
Edited by Eric Mc on Monday 11th February 10:45
Okay, to clarify :-
- I am UK based and UK VAT registered.
- my client is UK based and UK VAT registered.
- my suppliers are overseas and VAT registered in the relevant country (Luxembourg and Ireland)
- the suppliers' invoices to me do not contain VAT, although they do quote their VAT numbers for the countries they are based in.
SO, as my client is UK based (as am I) then I am duty bound to charge VAT, even if there is none on the invoices I have received from my suppliers ?
- I am UK based and UK VAT registered.
- my client is UK based and UK VAT registered.
- my suppliers are overseas and VAT registered in the relevant country (Luxembourg and Ireland)
- the suppliers' invoices to me do not contain VAT, although they do quote their VAT numbers for the countries they are based in.
SO, as my client is UK based (as am I) then I am duty bound to charge VAT, even if there is none on the invoices I have received from my suppliers ?
Eric Mc said:
How does that work then?
There is no 15% VAT rate in the UK. Is this because Ebay is non-UK based?
I presume you are referring to commisions and charges raised by Ebay for facilitating the sale.
Ebay is based in Luxemberg (i think) and they only charge 15%. Ebay have effectively kept the gross charge the same and pocketed the 2.5% margin.There is no 15% VAT rate in the UK. Is this because Ebay is non-UK based?
I presume you are referring to commisions and charges raised by Ebay for facilitating the sale.
Edited by Eric Mc on Monday 11th February 12:46
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