Reverse charge - VAT on services from EC on vat return

appleapple Settling In NicelyRegistered Posts: 39
Can anyone,please advise:

my client had an acquisition of goods with service (supplying and installing of security system). He received 1 invoice which shows materials supplied and also service provided, the installation.
1. My understanding of the reverse charge would be that he is accountable for vat on the service here, in the uk so i should enter this as sales in boxes 6 and 1 of the vat return and as purchases in boxes 7 and 4. but nothing in box 9

2. vat on goods should go to box 2 and the acquisition to box 9

i was told on the vat helpline that i should enter everything into box 7 only because i have only 1 invioice. im not sure if this is correct.

can anyone confirm?
many thanks

Comments

  • Gem7321Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    This might help
  • appleapple Settling In Nicely Registered Posts: 39
    thanks, it is helpful. the value of the service is less than the de minimis limit so i think i need to handle as normal acquisition from EC.
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038
    apple wrote: »
    Can anyone,please advise:

    my client had an acquisition of goods with service (supplying and installing of security system). He received 1 invoice which shows materials supplied and also service provided, the installation.
    1. My understanding of the reverse charge would be that he is accountable for vat on the service here, in the uk so i should enter this as sales in boxes 6 and 1 of the vat return and as purchases in boxes 7 and 4. but nothing in box 9

    2. vat on goods should go to box 2 and the acquisition to box 9

    i was told on the vat helpline that i should enter everything into box 7 only because i have only 1 invioice. im not sure if this is correct.

    can anyone confirm?
    many thanks

    VATPOSG3400 deals with the installation of goods.

    EC and UK law both state that the place of supply re: installation of goods is the place where the goods are installed, i.e. in this case the place of supply is the UK.

    Interestingly, according to VATPOSG3400, even separate contracts with the same supplier (i.e. one to supply the goods and the other to perform the installation or assembly) should normally be treated, for place of supply purposes, as a single supply of installed or assembled goods.

    VATPOSG3400 can be found by going onto the HMRC website > VAT > Technical VAT Manuals > International VAT > Place of supply - goods > VATPOSG3000 > VATPOSG3400 (the G stands for goods).

    Given that the installation of goods is found within the "Goods" section of the HMRC guidance I would have thought that this is not a service, i.e. your client should account for the acquisition VAT and enter this into Box 2 of the VAT return and (assuming your client is not partially exempt) reclaim all the VAT in Box 4 (i.e. there will be a nil effect in the VAT return). I would agree that in Box 9 you would show the value of the acquisition of the "goods and related services" excluding VAT, from all other EU member states.

    Hope that helps
  • appleapple Settling In Nicely Registered Posts: 39
    thanks, i am getting there...
    I've read VAT 425/11.10 re installed&assembled goods. according to the notice the supplier can choose a simplified procedure for not registering here for VAT. they did not do it so i guess they should have registered for VAT as a one off. they did not do it either so it is still not clear what i should do. i do not want any problem to my client or the supplier
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038
    apple wrote: »
    thanks, i am getting there...
    i guess they should have registered for VAT as a one off.

    Why should they? Have they met the criteria for VAT registration in the UK? If not, then they shouldn't register.
  • appleapple Settling In Nicely Registered Posts: 39
    they have met the criteria but they have not registered. they have not chosen the simplified procedure either. so i do not know what option my client has now. can he go for normal procedure? box 2, 4 & 9?
Sign In or Register to comment.