VAT and triangulation

frevelo
frevelo MAAT, AAT Licensed Accountant Posts: 4 New contributor ?
Hi, I wonder if anyone can help with a VAT triangulation query I have?

I have a UK VAT registered client selling goods to another VAT registered UK company. However the goods hve been shipped directly from the sellers parent company in Italy (who is not UK VAT registered).
The client charged VAT on this invoice, however their Infor LN ERP system has flagged this up as being incorrect.
I believe VAT should not have been charged but I do not know for sure and I cannot find an anwer, can anyone help?
Thanks
Francesca

Answers

  • crispy
    crispy Registered Posts: 465 Dedicated contributor ? ? ?
    Hi,

    I agree that no VAT should have been included on your clients Invoice, as VAT has already been charged on import of the same Goods (import VAT) and shipped direct to the customer. Including VAT on their Invoice means that UK VAT has now been charged twice for the same movement of goods.

    Am by no means an expert, however I would Zero Rate the Invoice.

    AndrewLeyland
  • frevelo
    frevelo MAAT, AAT Licensed Accountant Posts: 4 New contributor ?
    Hi

    Thank you for your response. That makes perfect sense, as they would have paid duty and import VAT to the carrier.

    HMRC were no help at all as they confused things by saying we must charge VAT.

    I appreciate you coming back to me and now I am a step forward. Now to reverse the incorrect transaction in Infor LN with a credit note and set up the customer again, with a Zero rated VAT code and reinvoice.

    Thanks again.
  • crispy
    crispy Registered Posts: 465 Dedicated contributor ? ? ?
    Hi,

    Happy to help, I found that the VAT section of HMRC used to be one of the easier / more helpful departments to contact but agree that they now seem pretty hopeless. I have an ongoing query where I have telephoned (30mins odd of being on and off hold only to be hung up on and the person seemed to have no idea how to help and had an abrupt / arrogant attitude), have competed their online query form and written a letter but still no response....
  • frevelo
    frevelo MAAT, AAT Licensed Accountant Posts: 4 New contributor ?
    I think the people that answer the VAT line seem to have had little training in VAT and tend to give out incorrect information.
    I may have to invest in Croner-i.
    Thanks again.
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