Accounting for Reverse Charge VAT when not VAT registered

UKSBD

Moderator
  • Business Listing
    Received a service from EU company

    Not charged VAT but it says;
    "VAT to be accounted for by the recipient"

    We are not VAT registered so what happens?

    Should the EU company charge us VAT, is there a risk that we can be charged VAT at a later date if it is discovered we are not VAT registered and paid no VAT?
     

    Bobbo

    Free Member
    Jul 7, 2020
    44
    6
    Assuming it is correct you are not VAT registered, do absolutely nothing.

    The EU company cannot charge you UK VAT unless they have a UK vat registration. If you weren't 'in business' they probably would've charged you the VAT equivalent of whatever country they're based in.
     
    Upvote 0

    UKSBD

    Moderator
  • Business Listing
    Assuming it is correct you are not VAT registered, do absolutely nothing.

    The EU company cannot charge you UK VAT unless they have a UK vat registration. If you weren't 'in business' they probably would've charged you the VAT equivalent of whatever country they're based in.


    Thanks.

    I get all that, but in their terms and conditions it says we are responsible for all TAX and VAT implications.

    If it turns out that they should have charged us VAT can they then turn round and say it is our responsibility because we agreed to their terms.

    Am I over thinking this and should just be thankful that they are not charging VAT?
     
    Upvote 0

    lesvatadvice

    Free Member
    Jul 7, 2011
    870
    145
    The Ts & Cs refer to your being responsible for all TAX and VAT. Whether or not the Ts & Cs say that, you are always responsible for tax and vat. Part of your exercising that responsibility is using the forum; you should also speak to your Accountant, if you have one.

    In other circumstances, EU suppliers charge unregistered UK businesses VAT, so you should be grateful that they have not done so.
     
    Upvote 0

    UKSBD

    Moderator
  • Business Listing
    In other circumstances, EU suppliers charge unregistered UK businesses VAT, so you should be grateful that they have not done so.


    Which is correct though?
    Does it effect us if one does it one way and one does it another, or is that their problem?
     
    Upvote 0

    UKSBD

    Moderator
  • Business Listing
    Thanks,

    yes, I was comparing Google Advertising to Microsoft Advertising

    Google don't charge VAT but Microsoft do.

    The company has bought 2 or 3 things from EU companies (Anti Virus, FTP software, Graphic packages, etc.) and have always been charged VAT in the past.

    Have things changed since we left or have they been doing things wrong?
     
    Upvote 0

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