EC Sales

[Deleted member 24925]

We have a UK VAT registered customer and have done some work for them in Southern Ireland (outside UK but within EC) the UK customer will be invoiced with this work using their UK VAT number, my question is do I invoice them with 15% VAT using T1 on Sage or 0% VAT using T4 for customers in EC?

Advice please
Thanks

 

[David Griffiths]

Probably one for the VAT experts, but I'm sure that they are going to ask what you mean by work. Was it the supply of goods or services?

 

[Deleted member 24925]

Supply of both goods and service

 

[frauke]

We have a UK VAT registered customer and have done some work for them in Southern Ireland (outside UK but within EC) the UK customer will be invoiced with this work using their UK VAT number, my question is do I invoice them with 15% VAT using T1 on Sage or 0% VAT using T4 for customers in EC?

Advice please
Thanks

I would invoice with 15% VAT, as your customer can reclaim the VAT so it makes no difference to them. If you used T4, for customers in the EC and the HMRC later decide you did it wrong, you'll still have to charge it and could be liable to a penalty, charged interest etc.

 

[Ader]

Not sure I undertsand...

What work have you done and where? - I'm thinking you're a UK based business with a UK VAT registration and may have done work in Ireland - Is that right? If not telll all

Is your customer VAT registered is the next question? If so where - In Ireland and/or UK?

Many cross border supplies can be zero rated if supplied to a VAT registered person but it depends what you've done and where - Services can be tricky but it depends what the work is - So Need details to help out properly.

Give details and I can help - I hope

Happy to deal with via PM

ps - I know I've not been on here much so no-one knows me but I've done a lot off international tax including cross border VAT work in my life and for major plc's and with the Big 4 so I'm not a numpty honest.

 

[3pic]

You need to be more specific with regards what you have done for them.

Supply of goods and services suggests to me a supply and install of goods into a factory or something like that. Is that the case?. If so, the place of supply of a supply & install job is where the goods are installed = Eire.

You mas have a liability to register for VAT in Eire if that is the case, but depends upon hat kind of supply/install you are doing (ie, are you bilding a building or just fitting one out?).

Next, the goods you supplied, were they supplied from the UK to Eire or were they acquired in Eire>

Next, were your services performed in the UK (ie, back office admin) or performed in Eire (ie, install, set-up, etc) or both?.

You MUST establish where you supply has taken place before you can decide what VAT code to use. Once you know what you supplied and where, then the answer will come easily. So if you can fill in the blanks for us, we can pin it down.

It'll either be a UK supply @ 15% or it will be a reverse charge supply (you zero rate your invoice and customer accounts for VAT in their own country), but there may still be a requirement to register for VAT in Eire as from memory they have a Nil registration limit for non-Eire traders making supplies of construction/installs in Eire.

 

[Ader]

there may still be a requirement to register for VAT in Eire as from memory they have a Nil registration limit for non-Eire traders making supplies of construction/installs in Eire.

That's right - Non Irish based businesses have a zero threshold - As compared to Irish businesses where the threshold is €75,000 - Doesn't seem very EU friendly but them's the rules

 

[frauke]

the UK customer will be invoiced with this work using their UK VAT number

This above statement is the relevant bit...... the rest does not really matter.

Until last year I looked after the VAT for a UK manufacturer that exported 90% of everything they made. HMCE did regular visits as our work was very "complicated" both VAT and export/import wise. We always had large VAT reclaims each quarter.

We used to build "kit" that could be shipped anywhere in the world, could come back to us, go somewhere else, and of course got paid for from another country. Then of course we also installed, maintained and serviced the "kit" where ever it was. One of our UK service contractors would always invoice us including VAT no matter where they did the work in the world (including Ireland, were we did a lot of work too). I did point out that the services were often VAT free, but their attitude was, it didn't cost us anything (because we reclaimed it), and they'd rather charge it than have the VAT office decide they'd got it wrong.

Sometimes it does not matter if it is charged, even if it may not have to.... it is more likely to cause problems if it is not charged when it should be. (I've never seen the VAT office worry about VAT being charged in error, only when its not charged!)

 

[Ader]

This above statement is the relevant bit...... the rest does not really matter.

Until last year I looked after the VAT for a UK manufacturer that exported 90% of everything they made. HMCE did regular visits as our work was very "complicated" both VAT and export/import wise. We always had large VAT reclaims each quarter.

We used to build "kit" that could be shipped anywhere in the world, could come back to us, go somewhere else, and of course got paid for from another country. Then of course we also installed, maintained and serviced the "kit" where ever it was. One of our UK service contractors would always invoice us including VAT no matter where they did the work in the world (including Ireland, were we did a lot of work too). I did point out that the services were often VAT free, but their attitude was, it didn't cost us anything (because we reclaimed it), and they'd rather charge it than have the VAT office decide they'd got it wrong.

Sometimes it does not matter if it is charged, even if it may not have to.... it is more likely to cause problems if it is not charged when it should be. (I've never seen the VAT office worry about VAT being charged in error, only when its not charged!)

I used to work for a company like that in Crawley

Your services contractor could have been right to charge VAT - If it was a 'reverse charge' type service then the place of suppluy shifts to where the customer is based - So if he was invoicing the UK company then teh place of supply sgifts to the UK - hence he has to charge VAT. It all depends on what type of work they were doing and where.

Just another complication in the awfully constructed EU VAT rules

 

[frauke]

I used to work for a company like that in Crawley

Your services contractor could have been right to charge VAT - If it was a 'reverse charge' type service then the place of suppluy shifts to where the customer is based - So if he was invoicing the UK company then teh place of supply sgifts to the UK - hence he has to charge VAT. It all depends on what type of work they were doing and where.

Just another complication in the awfully constructed EU VAT rules

I did explain the contractor was NOT WORKING IN THE UK, and therefore the supply was not provided in the UK. (not a reverse charge type service). They got on an aeroplane or ferry (to Ireland) and arrived in another country before providing the service. (We normally arranged for and paid for the flights, hotels etc.)

The contractor normally did not provide a supply in the Uk - just the invoice was paid by a UK VAT registered company. I did explain there were NOT WORKING IN THE UK. The UK VAT registered Company was invoicing a non UK company. Infact the EU companies were not reported as a EU service unless it was linked to an installation. (I made an error with one, and reported it on the VAT return, only to have the HMRC query why it did not agree with out intrastat submissions. When I explained, I was told it was not reportable.)

I do agree it can be complicated, but there are occassions when we (accountants) make it more complicated than it needs to be.

 

[Ader]

I did explain the contractor was NOT WORKING IN THE UK, and therefore the supply was not provided in the UK. (not a reverse charge type service). They got on an aeroplane or ferry (to Ireland) and arrived in another country before providing the service. (We normally arranged for and paid for the flights, hotels etc.)

The contractor normally did not provide a supply in the Uk - just the invoice was paid by a UK VAT registered company. I did explain there were NOT WORKING IN THE UK. The UK VAT registered Company was invoicing a non UK company. Infact the EU companies were not reported as a EU service unless it was linked to an installation. (I made an error with one, and reported it on the VAT return, only to have the HMRC query why it did not agree with out intrastat submissions. When I explained, I was told it was not reportable.)

I do agree it can be complicated, but there are occassions when we (accountants) make it more complicated than it needs to be.

fair enough if it was not reverse charge type services - I was just trying to point out that with reverse charge type services it can be different and so you need to be clear what services are being provided - As sometimes even though work is being provided in another country it doesn't mean the place of supply is there

Do we accountants make it more complicated than it needs be? In this case I'm not sure I agree - It's a complicated area, so the unitiated need to tread carefully - there are plenty of mines around.

Oh and it all change nexts year just to make life a bit more fun