[VAT-adviser]

For VAT purposes it is the physical movement of goods that is relevant, rather than the invoicing name or address. An invoice to an Irish customer when the goods are not leaving the UK will not normally be classed as an export, and UK VAT would be chargeable. However, goods being sent to Ireland on behalf of a UK customer without an Irish VAT number are still subject to UK VAT at the usual rate (even if the customer is registered for VAT in the UK).

A VAT-registered UK business does not need to charge VAT on goods it is sending to Ireland, provided it keeps documentary proof of export. It must also obtain the Irish customer’s VAT registration number and show it on the invoice. If the goods will finally get exported to Ireland then you need proof of export.

In addition, the net value of the sale must still be reported on the UK VAT return, in boxes 6 and 8. It should also be included on the EC Sales List, and the Intrastat return if the business is required to make one.

The UK business is able to reclaim any UK VAT on the goods which it is exporting, subject to the normal rules about reclaiming input VAT.

If the Irish customer is not registered for VAT, and the UK business is not registered for Irish VAT, then UK VAT must be charged. In this case, the sale is included in box 1 and box 6 of the UK VAT return, but not box 8. It does not get included on the EC Sales List, but is liable to be reported on Intrastat. No VAT is chargeable on goods that would normally be zero-rated or exempt when supplied in the UK (for example, books, children’s clothing and some food items).

Hope this helps

[VAT-adviser]

VAT threshold is £85k and sales of zero-rated items count as ‘taxable sales’ as far as the registration threshold is concerned, along with sales that are subject to 5% or 20% VAT. You do not need to include anything that is VAT exempt in your assessment of the threshold.

You are unlikely to be caught by the flat rate-limited cost trader rules where the default rate is 16.5%. So in my view, a flat rate is generally better in your case.

However, you need to work out the various scenarios and see whether the increasing sales vs increase in your prices for the 20% VAT items is worth it in terms of profit and cashflows. You will also be able to claim VAT on the purchases if you are on normal VAT scheme.

hope this helps

[VAT-adviser]

Box 1 is the amount of VAT due in this period on sales – i guess in your case is 20% of 5,100 (if the 5,100 is the sales before VAT).

[VAT-adviser]

If you use the VAT cash accounting scheme there are special rules for completing boxes 1, 4, 6 and 7 of the return. All other boxes are completed as normal.

 

Box 1: is the VAT on cash receipts you have had (not invoices issued)

Box 4: is the VAT on the cash payments you have made (not invoices received)

Box 6: total cash sales (£1,000)

Box 7: total cash purchases ( £200)

[VAT-adviser]

correct – box 7 is purchases amounts (without VAT element).

[VAT-adviser]

For new builds (including a village halll or similar) the main contractor should not charge you VAT on all materials normally incorporated in a new dwelling — all construction materials, fittings such as solar panels, boilers, sewage treatment plants etc.

If you were charged VAT, you may need to ask the supplier to re-issue the invoices. 

If not new build, standard VAT applies to solar panels.

[VAT-adviser]

Some shops including online marketplace do not issue invoices with VAT lines shown and these are not accepted by HRMC for claiming input VAT. However, you can request a VAT invoice from a seller and most respond within days. So you can the use the VAT invoices as your support for your VAT returns.

[VAT-adviser]

I agree to your understanding that if you backdate, then output tax will be charged on the sales and note payments received are assumed to include VAT and hence 1/6 of receipts is accounted as output VAT. An alternative to recover this output tax from our clients is to re-issue the invoices or issue VAT only invoices (some clients are o with this if they can recover VAT ).

You can indeed get an earlier date of registration (up to 4 years from now) if you can convince HRMC. This means you can claim upto 8 years of input VAT on goods ( 4 years registration date backdated plus the usual 4 years claim on goods) and for services – 4 years plus 6 months using the same rationale.  The provisions for back-dating effective date of registration are contained in the VAT Act 1994, Schedule 1, paragraph 9(a), and this entitles a person who is not, and is not required to be VAT registered to register for VAT if he can satisfy HMRC that he is in business and is making taxable supplies. 
 

[VAT-adviser]

The starting point is to find out what the 23% relates to?

You are right in terms of EU VAT treatment before BREXIT ie:

Goods

UK to EU (dispatch) – zero rated of business & VAT registered customer otherwise charge UK VAT.

EU to UK (acquisition) – reverse charge VAT

Services

Business (A) to Business ( – VAT place of business is country B.; therefore, services from UK to EU to business EU VAT applies to the business and hence zero rated in UK, quote VAT number and include on Sales list. Business to consumer – place of business is the business hence UK to EU, UK VAT applies.

However there are cases where one may need to register for VAT in different EU countries if your client supplies cross-border telecommunication, television, and radio broadcasting, or digital services to non-taxable persons. You can google more about this on or find out here: https://europa.eu/youreurope/business/taxation/vat/vat-digital-services-moss-scheme/index_en.htm.

Otherwise, I suggest you get more information from your client.

Reghards

[VAT-adviser]

Simon, you are technically right, you will be adding 20% to your invoices but you pay 12% to HRMC (and you dont claim input VAT on your expenses you incur). Normally a VAT registered business charges 20% on its sales (which is paid to HMRC) and is charged 20% on its purchases and expenses( which it claims from HMRC) – the net amount is claimed or paid to HMRC.

The Flat Rate VAT Scheme is a simplified scheme for businesses with an annual turnover of under £150,000 (excluding VAT), whereby a business pays a fixed percentage of its annual turnover. It enables businesses to keep the difference between the amount paid to HMRC and the amount of VAT charged to customers – it can save you money or cost you money depending on the expenses you incur – in your case since you don’t have any purchases, it is likely to save you money.

Information regarding the trade sectors and flat rate percentages can be found in Vhttps://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay You would use these rates if you’re not a limited cost business (also see link above). If you’re a limited cost business you need to use 16.5%. 

Due to the abuse of the flat rate scheme, HRMC now classifies a business that spends a small amount on goods as a ‘limited cost business’ or ‘limited cost trader’ are must pay a higher flat rate of 16.5%.

Given you don’t have many purchases, it likely that you are a limited cost trader and hence 16.5% will apply instead.

[VAT-adviser]

Therefore sales invoices issued before the EDR are excluded from the VAT return even for cash accounting schemes.

[VAT-adviser]

Whilst waiting for the company to be VAT registered you cannot charge your clients for VAT.

[VAT-adviser]

A seller’s option to tax does not transfer to a purchaser and a landlord’s option to tax does not transfer to a tenant. Each party in the chain of supply should consider whether or not it is appropriate for them to opt to tax their interest in the property. Therefore as a tenant is sub-letting you should independently consider whether you should opt to tax the property.

Before you opt to tax, it may be worth reading some materials on HRMC website on the implications as the decision is not easily reversible. The link below also explains how to opt to tax: 
https://www.gov.uk/government/publications/vat-notification-of-an-option-to-tax-land-andor-buildings-vat1614a

[VAT-adviser]

From a VAT perspective, the sale of shares can be an exempt supply, however as you have pointed out in your email, the question is whether A is providing advice or intermediation or both. Principally, whichever element is the predominant service will indicate whether VAT is due or not.

My guess is the M&A company is VAT registered and A is also VAT registered, and hence both entities maybe VAT neutral even if VAT is charged.

[VAT-adviser]

Hi there

The issue of VAT on finance leases is now slightly complicated than in the past years. Firstly the VAT treatment of a lease is not affected by the accounting treatment which follows accounting standards. Secondly following the Mercedes-Benz
Financial Services UK Ltd case (Case C-164/16), it is a requirement to look at the what the leasing contract says in terms of ownership of the computers. 
This article can help you in making the correct decision: https://www.shlegal.com/docs/default-source/news-insights-documents/download-pdf300e7b85045b6c60befcff000023f0be.pdf?sfvrsn=cb55175b_0

[Author]

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