VAT on EU acquisitions - Help!

System
System Posts: 100,534 🤖 Admin 🤖
edited 12:08PM in AAT member discussion
A VAT registered UK client has a Belgian supplier who is charging him 'Belgian' VAT on goods (at 21%).
I'm attempting to complete the client's Vat Return. Shouldn't these goods be zero rated as they are EU acquisitions?

Thanks so much.

Bluerhapsody

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    Probably yes!

    Has your client provided the Belgian supplier with their UK VAT number?

    Could be an oversight on the Belgian companies part. What products are being supplied? Presumably they have been shipped to the UK.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    You have to give the EU company your VAT number, as without it they are obliged to charge VAT.

    Give them the VAT number and ask them to re-submit the invoice without VAT on it.

    Then what you need to do on the VAT return is put the equivalent UK VAT in box 2 and take the same amount off in box 4. Finally don't forget to put the net amount in box 9.

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    The Vat helpline suggested that the 21% Belgian Vat would need to be paid and the customer could recover it by reference to HMRC Notice 723, not via his Vat Return, although the Belgian Vat paid would still have to go in Box 2 of his return.

    The goods have been shipped here, Dean, and would be liable to 17.5% Vat here. I don't see his Vat No. on their invoice, so it may be a case of what Claudia says.

    It's not totally clear to me by looking at the invoices of a few other EC suppliers of his, that they are Vat registered in their own country. Has anyone else had this difficulty?

    Thanks for your comments.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    Whenever I have this issue on software I buy online the VAT I pay goes into box 2 but then comes out of box 4. The total net price goes into box 7 so long as you have a VAT invoice from the supplier as per the usual HMRC rules.

    Regards,
    Ben
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    Ben I am not convinced that what you are doing is correct. If EU VAT is charged then the only way of getting that back is by completing a god-awful form and collecting the VAT back direct from that country's VAT authority - and it has to be completed in the language of that country.

    If I can find the relevant page on HMRC website - some hope - I will post the link here.

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_InfoGuides&propertyType=document&id=HMCE_CL_000860

    This, amongst a lot else states - "You cannot recover VAT paid in another Member State as input tax on your VAT return but you may be able to use this scheme to reclaim it."

    Hope this helps.

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    Hello Claudia,
    Thanks. This means I should be supplying my supplier with my VAT number before they supply?

    Ben
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:VAT on EU acquisitions - Help!

    Exactly - often software suppliers of stuff you download are registered for VAT in Ireland - there is a box to fill in if you are registered for VAT, and then they bill you net not gross.

    For example - I think Irish VAT is 21%.

    You buy something for £10.00 - Jo public gets charged £12.10 and you only get charged £10.00.

    On your VAT return you put £1.75 in box 2, an extra £1.75 in box 4 and £10 in box 9.

    Claudia

    PS - if you use Sage the tax code is T8.

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