Help! Question on zero rated vat

System
System Posts: 100,534 🤖 Admin 🤖
edited 12:08PM in AAT member discussion
Hi if a person buys in a material from Italy at zero rated vat when they sell it in this country do they charge it out at our 17.5% Vat rate.

Thanks for your help. My mind has gone blank but I think it would be plus VAT.

Regards, Sarah

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help! Question on zero rated vat

    Hi,
    Its alright I have rang the Inland Revenue so by problem is solved.
    Regards,
    Sarah
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help! Question on zero rated vat

    You've got me intrigued now - what was their answer?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help! Question on zero rated vat

    Hi,
    They said to charge VAT as normal.

    regards,
    Sarah
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help! Question on zero rated vat

    Hope you don't mind me adding to this - there is some VAT accounting to do for the purchase.

    When a UK VAT registered business buys goods from and VAT registered business in another EU member state, then the supplier can charge zero VAT. The UK business still has to account for the VAT on the goods.

    In the VAT return you do this -
    Box 8 - the net cost of the goods
    Box 2 - 17.5% on box 8 value
    This increases the amount of VAT due, but in most cases you can reclaim the Box 2 amount as input VAT by incuding the same amount in Box 4. Check the VAT guide for individual circumstances or call the helpline 0845 010 9000.

    The same happens in reverse when a UK VAT registered business supplies goods to a VAT registered business in another EU member state. Your sales invoices will have zero VAT, but the customer has to account for VAT in their country.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Help! Question on zero rated vat

    Hi Sheelagh.

    Thanks for you post it was interesting.

    I was only asked the question by a friend he has an accountant who sorts out his paperwork for him but he happened to be talking to me and mentioned it in passing so it peaked my interest.

    I am going to save your reply though for future reference. You never know he may ask me to do his Vat returns for him (that would be good.
    If not it may come in later.

    Thanks again,
    Regards,
    Sarah

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