VAT Questions

[quaysideltd]

Hoping some one here may be able to help with a VAT question. Can't get an answer on the customs helpline :rolleyes: which seems to be the norm at the moment judging from other comments on here!

Anyway my problem is this - I have a convenience store and am VAT registered. Purchased wafer biscuits from a new wholesaler who charged me VAT.

I don't charge VAT on biscuits unless chocolate coated, these wafer ones are NOT coated and have a vanilla cream between the layers.

Rang wholesaler and questioned why I was charged VAT. They say 'they are obliged to as they are not the end user. Same as with products like charcoal'.

My main wholesaler doesn't charge VAT on wafer biscuits (nor charcoal as her example) and I don't understand this 'end user' comment. In theory I'm not the end user of any of the products I sell but that doesn't oblige me to charge VAT.

Are they correct? And should I be charging VAT or not?

[KDMINX]

I'm sure a VAT expert will be along in a bit...

I would pay the invoice -the VAT for now, that will probably change their tune!

[Ray_Stewart]

You are right in when you charge VAT but these may be a mix like the Jaffa Cakes were a few years back.

Does your old wholesaler charge VAT on the same product? If not then you shouldn't

If it is the first time you have bought these why not ring the manufacturer and see how they treat them when they sell to the wholesalers.

[quaysideltd]

You are right in when you charge VAT but these may be a mix like the Jaffa Cakes were a few years back.

Maybe but there is no chocolate on the product which was the argument with Jaffa cakes wasn't it?

Does your old wholesaler charge VAT on the same product? If not then you shouldn't.

Didn't buy exact item but similiar and they were not VAt rated.

If it is the first time you have bought these why not ring the manufacturer and see how they treat them when they sell to the wholesalers.

Manufacturer is austrian :redface: not sure a telephone call will help! Found an internet site selling said wafer biscuits and they are not charging VAT.

Presumably I can reclaim the VAT I've been charged even if I've been charged wrongly?

[Ray_Stewart]

Yes you can reclaim the VAT they charge anyway.

Perhaps it would be prudent to keep a permanent record of this thread just in case you get questioned in a VAT inspection.

[spidersong]

Yes you can reclaim the VAT they charge anyway.

Perhaps it would be prudent to keep a permanent record of this thread just in case you get questioned in a VAT inspection.

In this case it probably won't cause a problem, but don't necessarily apply this to all situations. Legally there is precedent that you're only able to recover VAT that is properly charged to you, this VAT isn't being properly charged.

To be fair the only times HMRC tend to argue the point is where the sums involved are quite substantial, or with transfers of a going concern.

How long have the people been in business?, as that 'end user' comment sounds like old sales tax thinking from before VAT was introduced, or it has also been part of sales tax systems in other countries so are they new to UK trade.

But basically the law is the law; Item 1 of Group 1, to Schedule 8 of the VAT Act requires the zero-rating of food for human consumption it excepts "Confectionery, not including cakes or biscuits other than biscuits wholly or partly covered with chocolate " from this. So if you've bought some biscuits that have never touched chocolate then they're zero rated to you no matter what you do with them afterwards.