Horse Dealing from Hungary

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
I know this may sound an unusual question, but has anyone had any dealings with clients who trade from other countries, particularly with regard to VAT, record keeping and exchange rates?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    Hi TC

    Do you mean Hungary and horse dealing specifically?

    I have one client who buys a lot from France and Holland and also exports both to EU and non EU countries - but not horses!

    Have you got Bernard Matthews as a client :lol:

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    Yes, horse dealing. My client runs a business that involves horses, but has decided to diversify. He wants to find buyers for horses, then travel to Hungary, buy and bring back horses, then sell them with commission to UK buyers. All sounds very complicated, particularly as his paperwork is not very tidy - a bit of a nightmare really. Any book-keeping ideas will be greatly appreciated as I have got to try and get his 16 year old daughter to keep the day-to-day records! Anyone want a new client!?

    No Bernard Matthews is not a client, but my mum does know him!!! :lol:

    And do we need to notify HMRC?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    I would speak to C&E - it will be a minefield - there is VAT on horse dealing. If they are dealing in "second hand horses" (eh?) then they can register for the margin scheme - ie only pay VAT on their profit not the whole sale price (as opposed to wholesale).

    My advice would be to get a specialist inspector to come out and talk to you and your client about all the ins and outs of this particular one.

    If it is one of their iffy areas, then you will get regular inspections, so the paperwork needs to be tip top.

    Good luck - I think you might need it :lol:

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    Paperwork won't be tip top with this one - I know. I may well suggest that he contacts them direct. I don't really want to get involved too much because I know it will be messy.
    Anyone out there want a "challenging" client?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    If one hand is 4 inches, how high is a second hand horse ?!?!?! :lol:

    Standard VAT rules apply, don't they. Is Hungary part of the EU? If so, then the EU rules apply. If not, the ROW rules apply.

    By the way, you'll find most horse dealing farmers have really good accounting records, as in really good for providing you with chargeable time!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    I don't really understand your reply. Sorry.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    First bit's my humour: ignore it if you must.

    Second, the VAT rules apply as they would for any other product/service.

    Third, horse dealing farmers tend to be as you described - not very good at paperwork. This is what keeps us in work. If everyone was good at book-keeping, there'd be no need for us and we wouldn't get paid!

    As for Hungary, it is part of the EU for VAT purposes.
    http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000096&propertyType=document shows that horse owners are liable to VAT schemes.

    An item imported from a VAT registered supplier is subject to VAT at import, but this can be claimed back as input VAT. If your client is VAT registered, then he should notify the supplier of his VAT number, which should be shown on invoices.

    As for getting HMRC involved, they can be helpful. But your client should speak to his accountant first. Bear in mind that you must never take on a task for which you are not qualified, competent, or confident. At the very least, you need to talk to the AAT members in practice help desk.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    My client intends to buy from Hungarian farmers, who will not be registered for VAT. He will be purchasing horses to order. Alot of the transactions are to be "cash transactions". I hate this sort of thing really.
    He was hoping to avoid VAT registration by using the cash from his client to buy the horses, keeping his commission and declaring just his commission as income. Complicated?! Legal?!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    Yes and no - respectively!

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    Mmm thanks. I am going to have to get away from this client!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Horse Dealing from Hungary

    Hi

    At a gallop I would advise :lol:

    When I was a mere bank clerk many years ago, we had a customer who dealt in cash to buy/sell horses. Needless to say the Revenue & VAT men eventually caught up with him and he spent a few years inside :(

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