VAT on export clarification needed

[Big Pete]

can someone just give me a simple answer please ?

I was always told VAT is not charged when selling buying to Europe .. Then last december i read a VAT note saying as from 1st Jan 2010 all sales to Europe are to be charged the VAT..

Now i have heard that this is wrong and we do NOT charge VAT.

what is the actual line ?

In simple terms please all we do is sell tyres from UK to Spain not rocket science is it ? so what is it , do i charge or not ?

[David Griffiths]

Supplying VAT registered customers in Spain? (Regsitered for Spanish VAT)

Read this thread (http://www.ukbusinessforums.co.uk/forums/showthread.php?t=143026) from yesterday

Supplying people who are not registered for VAT?

Charge UK VAT

[Big Pete]

Supplying VAT registered customers in Spain? (Regsitered for Spanish VAT)

Read this thread (http://www.ukbusinessforums.co.uk/forums/showthread.php?t=143026) from yesterday

Supplying people who are not registered for VAT?

Charge UK VAT

I read that ,that is what confused me as the VAT office notes said as from 1-1-2010 VAT is to be charged ..

so thats why i am now unsure whats what ?

i sell truck tyres so assume the Spain customers are VAT registered but if i sell car tyres chances are there not..

But how the heck can a shopping cart know who is a trade customer or joe public ?

[David Griffiths]

To zero rate the supply you have to show the customer's Spanish VAT number on the face of the invoice - as explained in the other post - and keep evidence of the fact that the tyres have left the UK to go to Spain.

If you are using a shopping cart, it seems to me that you don't have the customer's VAT number, therefore you charge VAT.

Fundamentally, even if they are registered then you have to charge VAT because you don't have or show their VAT number.

[Big Pete]

So if " enter your vat number" here in spanish was added ,then i guess we dont charge it ,is that the gist ?

no vat number then vat added

[David Griffiths]

That's right, but I'd make sure that the number is checked and not simply taken at face value.

Chris from Tax Attack provided a useful link for this

[Richard231]

I have a online retail client who sells to some EU VAT and non-VAT registered customers.

They charge UK VAT to everyone, and explain the following to someone from the EU who contacts them claiming to be VAT registered:

When the customer receives the goods, they must sent back to my client the stamped customs paperwork, along with proof of their (e.g) Spanish VAT number.
At this point, my client now has proof that a) the goods left the UK and b) they were sold to a VAT registered customer (they check that the VAT number is valid with HMRC).
They then issue a credit note for the full gross amount, re-issue the invoice showing the customers VAT number without VAT, and send them both with a cheque refunding the VAT which had been charged (and paid) originally.

I know that this sounded cynical at the beginning, but you wouldn't believe the number of people who have tried to fake it to save!!

Hope this helps

[3pic]

Traders can use the Europa VAT number checker but all it does it confirm the number is valid, not that the number matches the business.

There;s nothing to stop a Spanigh business using the Spanish VAT number of say Ikea or a Spanish equivalent of Argos. Number will still be valid just not related to the actual Spanish purchaser.

HMRC;s take on this is that provided the UK supplier has taken steps to validate VAT numbers (ie, use the Europe website), then they will not have too big a problem where a UK supplier has sold something to an EU customer who may have 'borrowed' a VAT number.

Clearly, Richard's client has a system that is fairly watertight, but a bit of an admin burden - guess it will come down to suppliers attitude to risk and perfection.;)

[Richard231]

Clearly, Richard's client has a system that is fairly watertight, but a bit of an admin burden - guess it will come down to suppliers attitude to risk and perfection.;)

Unfortunately Richard's client is one of those nightmare clients where the individual should be a liability on the co's balance sheet!! :eek:

It helps that they've only ended-up refunding amounts twice in 3 years!!!

They have so many investigations for everything (just come out of a 5 yr investigation which covered VAT, PAYE, CT, IT, IHT of both companies, the director, secretary & 3 family members) that i've had to try to make sure that at least this is done correctly.

[David Griffiths]

I read the clause as effectively saying that they were going to charge VAT unless the customer jumps through too many hoops to make it worthwhile! :D

[Richard231]

There's no clauses, it's just procedural to ensure that they fully comply with HMRC regulations ;)