Please help! Global accounting VAT scheme . . .

[TWYF]

I have a client who runs an Ebay shop selling 2nd hand ceramics. The revenue are pulling him up for sales invoice non compliance. I'm reading and re-reading notice 718, sections 6.4 and 6.5 to determine whether or not he should have raised an invoice with the banner "global accounting invoice" on every sale, as they are telling us he should have done.

Section 6.4 seems to imply that his cash register (or e-bay record in our
case) is sufficient, with a sales invoice needing to be issued to other VAT registerd dealers only. Since the client operates an on line shop with a vast volume of sales on a daily basis my interpretation here would be that he can assume the customers are not vat registered unless they tell him otherwise, and therefore no need to raise the specific sales invoice with the said banner on.

Section 6.5 however states again that he "must issue a sales invoice to other VAT registered dealers. These invoices and any other global accounting sales invoice you issue must show . . . ". It's the bit that states "and any other global accounting sales invoice you issue must show"
that is worrying me!

Can you help? Is it a simple answer someone can give me? Are we correct that unless instructed otherwise the client is ok to assume that the customer is not vat registered, and therefore no need to raise a specific sales invoice with the banner, instead just issuing the "till reciept" or does he not have this perogative when operating the global accounting scheme?

 

[dnicoll]

Hmmm. As you say, paragraph 6.4 quite clearly says "If you have complied with the purchase conditions above you may use Global Accounting for the sale of the goods by:

recording the sale in your usual way, for example, by using a cash register;
issuing a sales invoice for sales to other VAT registered dealers and keeping a copy of the invoice; and
transferring your daily takings for eligible goods and/or totals of copy invoices to your Global Accounting sales record or summary (see paragraph 6.6)."

Para 6.5 then says "You must issue a sales invoice to other VAT registered dealers."

Para 6.6 then says "Although you do not have to keep your purchase and sales records or summaries in any particular way, they must include the following details taken from ... any sales invoices you may issue"

This quite clearly shows that he does NOT have to issue a sales invoice for EVERY sale - that is the whole point of the 'simplified' global accounting margin scheme for dealers of high volume low margin goods. He merely needs some way of identifying between VAT registered and non-VAT registered customers. One business I deal with does this very simply by asking its customers if they require a VAT invoice - if they do then they are clearly VAT registered, and he therefore issues the invoice with the global accounting statement on it. But he doesnt issue invoices to anyone else - just a credit card clop!

Sounds to me like the VAT man you are dealing with doesn't understand the global accounting scheme (which would not surprise me).

 

[KidsBeeHappy]

He can format his eaby invoice so that it puts the required statement on the bottom of the ebay invoice. This covers him in all situations, and solves the problem nicely.

"This invoice was issued under the global accounting scheme, and VAT must not be reclaimed on any amounts on this invoice". Or something along those lines.

All your client needs to do is format the ebay invoice.

We also sold secondhand/antique items on ebay, and had vat visits etc. We simply put the wording onto all invoices, ebay, computerised, and manual, because tbh, antiques dealers and the secondhand trade aren't re-known for their upfront honestness when it comes to VAT, so relying on customer honesty wasn't an option we wanted to take.

 

[KidsBeeHappy]

Also, no harm in adding the statement onto the till receipt. Most tills have the function to add some additional information.