Overseas supplier charging UK VAT

[clagar]

Hi all

One of our overseas (EC) suppliers is registered for GB VAT.

The supplies are made directly to another company (also EC) where they are used to assemble our final product, which is then delivered to the UK and sold to customers.

The supplies do not enter the UK at any time until the product has been completed.

The overseas supplier charges us VAT on his invoices. I'm not convinced he's making a taxable supply in the UK and consequently don't think he should be charging VAT.

Can anyone shed any light ?

Many thanks
Clagar

 

[Mister B]

To whom and where is the invoice paid? A UK based company with a UK bank account etc?

Mister B

 

[clagar]

We are invoiced by a Belgium company, but we pay into a British bank account. In sterling.

 

[TheAlbear]

From my understanding all EU countries should charge VAT at there local rate, so you should be asked to pay the Belgium rate.

 

[3pic]

From my understanding all EU countries should charge VAT at there local rate, so you should be asked to pay the Belgium rate.

For goods, between VAT registered entities in Europe, the supply is usually zero rated, with the receiving customer accounting for VAT in their own country and then reclaiming it as input tax on their VAt return.

For services, it could be zero rated again or standard rated.

 

[3pic]

Hi all

One of our overseas (EC) suppliers is registered for GB VAT.

The supplies are made directly to another company (also EC) where they are used to assemble our final product, which is then delivered to the UK and sold to customers.

The supplies do not enter the UK at any time until the product has been completed.

The overseas supplier charges us VAT on his invoices. I'm not convinced he's making a taxable supply in the UK and consequently don't think he should be charging VAT.

Can anyone shed any light ?

Many thanks
Clagar

Is this maybe triangulation?.

1. Who and where is YOUR customer (ie, do you sell the final product with the incorporated thing in it or does someone else do that?)

2. What is your overseas supplier charging YOU for? (ie, for dispatching the finished article or fitting the thing to the other thing?)

Thanks.

 

[yorkshirejames]

What is the product they supply? As you've guessed from the answers above, there are rarely simple answers to VAT questions.

 

[Paul Kelly ICHYB]

If the supplier is not in the UK, but the goods are supplied from the UK (maybe the supplier has the goods assembled in the UK), then they could be registered and supply with UK VAT.

That I am aware, if the goods are not assembled in the UK, but in the EU, and it is only their final destination, then the originating VAT rate would be used, if you are not VAT registered, or it would be zero rated if you are!

However, if they are registered for UK VAT and are charging it and you are registered, you should be able to pass it through the books, as normal.

I would advise contacting HMRC and discussing with your accountant for a more solid (almost accountable) response.