Claiming VAT prior to VAT registration

bobbo mcbobbo · May 2, 2019

So we've just become VAT registered effective 1 May 2019. We've been trading for some years already with most of our revenue coming from selling on Amazon. Amazon charge hefty selling fees for using their platform and we have been paying VAT on these fees until now.

Upon VAT registration HMRC allow you to claim back the previous 6 months of VAT paid on services. However, Amazon are based in Luxembourg with a 'LU' VAT number. Does this mean I cannot reclaim the last 6 months of VAT paid on Amazon fees?

Adam93 · May 2, 2019

You can only claim UK VAT back on a UK VAT return.

bobbo mcbobbo · May 2, 2019

So is there any way to claim this VAT back not on a UK VAT return?

Mr D · May 2, 2019

bobbo mcbobbo said:
So is there any way to claim this VAT back not on a UK VAT return?

do you do vat returns for the relevant tax authority.

bobbo mcbobbo · May 2, 2019

No only in the UK. It just seems unfair that I paid 1000s of £ in EU VAT and I can't claim it back, but had Amazon been based in the UK I could have. It's all EU, thought there might have been a way.

So what if I were to VAT register in Luxembourg? Could I then reclaim it?

Mr D · May 2, 2019

bobbo mcbobbo said:
No only in the UK. It just seems unfair that I paid 1000s of £ in EU VAT and I can't claim it back, but had Amazon been based in the UK I could have. It's all EU, thought there might have been a way.

So what if I were to VAT register in Luxembourg? Could I then reclaim it?

sorry were you paying to amazon the company in luxe or were you paying to amazon uk ltd in the uk.

bobbo mcbobbo · May 2, 2019

Amazon in Lux.

Alan · May 2, 2019

Now I know nothing about this so I thought I'd Google and found this, the implication is you can get a refund but only if you are VAT registered - it makes no mention of the 6 months prior to registration

https://www.gov.uk/guidance/vat-refunds-for-uk-businesses-buying-from-other-eu-countries

TheCyclingProgrammer · May 2, 2019

Strictly speaking you shouldn’t have been charged EU VAT in the first place as B2B supply of services is taxable where the customer belongs under the general rule, but a lot of companies don’t apply this treatment unless the customer is VAT registered.

Unfortunately unless you can convince Amazon to refund you the VAT on the basis that you are a business you won’t have much luck. You should at least supply them with your VAT number and they should not charge you VAT going forward. You will have to account for VAT yourself using the reverse charge.

bobbo mcbobbo · May 3, 2019

Thanks Alan, useful link.

TheCyclingProgrammer said:
Strictly speaking you shouldn’t have been charged EU VAT in the first place as B2B supply of services is taxable where the customer belongs under the general rule, but a lot of companies don’t apply this treatment unless the customer is VAT registered.

Interesting. Where can I read more about this? And yup, I've supplied my VAT number now, so should be fine going forward.

TheCyclingProgrammer · May 3, 2019

bobbo mcbobbo said:
Thanks Alan, useful link.
Interesting. Where can I read more about this? And yup, I've supplied my VAT number now, so should be fine going forward.

HMRC guidance here on receiving supplies from overseas suppliers:
https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec5

Relevant EU rules on place of supply:
https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/where-tax_en#supply_services

Specifically:

The place of taxation is determined by where the services are supplied. This depends not only on the nature of the servicesupplied but also on the status of the customer receiving the service. A distinction must be made between a taxable person acting as such (a business acting in its business capacity) and a non-taxable person (a private individual who is the final consumer).

A taxable person is:

The concept of a taxable person covers anyone who independently carries out an economic activity, even if that person is not identified for VAT purposes, but it also includes a non-taxable legal person identified for VAT purposes [Article 43 of the VAT Directive].

In other words this includes any business even if not VAT registered but also VAT registered individuals.

The general rule:

The supply of services between businesses (B2B services) is in principle taxed at the customer's place of establishment

Assuming the services supplied by Amazon full under this general rule (I believe they would), then the place of supply is the UK and Amazon should not have charged LU VAT. They may ask for a VAT number to prove your business status but you should be able to provide alternative that you are acting as a business.

Search

Search

Claiming VAT prior to VAT registration

bobbo mcbobbo

Adam93

bobbo mcbobbo

Mr D

bobbo mcbobbo

Mr D

bobbo mcbobbo

Alan

TheCyclingProgrammer

bobbo mcbobbo

TheCyclingProgrammer

Similar threads

Latest Articles