VAT help needed

[robertd]

Hi,

I have just started my own IT recruitment company and a lot of my work involes recruiting for Dutch companies, i have a questions regarding charging VAT on my invoices i send them.

1) Do i charge VAT on invoices i send them for placements i have made to them.

I have been told two different things regarding charging VAT, one from my accountant and one from a company i make placements for and would like to know if any one has the correct answer for mr.

Thanks

[multilingual]

If you are invoicing a Dutch company for products or services then you do not charge them VAT as long as they are also a VAT registered company and can provide you with their number.

You will then have to put that number, as well as the amount invoiced, onto the EU sales form which comes through once per quarter.

JB

[Joyous]

Hi Robert

The VAT treatment will vary depending on whether your recruitment company is acting as agent or as principal.

If you’re acting as agent you simply find the staff who then enter into a direct contractual arrangement with the client. The client is the employer and deals with all the PAYE. In this case you only account for VAT on the agency charge to the client.

If you’re acting as principal the staff supplied are employees of your company. The staff member provides services to your company which in turn makes a supply to the client. In that case you have to account for VAT on the full charge to the client unless the staff hire concession applies.

I’m presuming that as you’re in the recruitment business you’re aware of the staff hire concession.

Regards

Joy

[robertd]

Thankyou for that advice, we are acting as an agent in finding the staff for companines both perm and temp but as i said most of my clients are based in Holland and have been told by my accountant that no Vat is chargable but was also told by a client in Holland that we should.

[Joyous]

There is a general zero rating for the export of goods to Europe but when it comes to services, the answer is “it depends”. :roll:

Presumably your accountant is in possession of all the facts so I’d follow his advice. The reason your Dutch customer is happy for you to charge him VAT is because under the reverse charge procedure he has to account for output tax on the supply. If you charge VAT on the invoice it has an immediate cashflow benefit for him as he can offset this input tax against the reverse charge.

Don't you just love VAT? :D

Regards

Joy