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VAT system questions

Discussion in 'Accounts & Finance' started by braddo, Jun 13, 2018 at 7:43 AM.

  1. braddo

    braddo UKBF Regular Free Member

    285 22
    Hi All,

    I have a LTD that isn't currently registered for VAT due to turnover being below the threshold.

    Sometimes when I purchase items from business in the EU, they ask me for a VAT number and when I tell them I'm exempt, they say that they therefore need to charge me VAT which I then pay.

    They say that if I had a VAT number (ie. if I was registered for VAT), then they wouldn't need to charge me the VAT.

    Can someone explain how/why this works? Why would they not need to charge VAT to a VAT registered company?
     
    Posted: Jun 13, 2018 at 7:43 AM By: braddo Member since: Oct 9, 2010
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    13,234 2,863
    If a company that is VAT registered in the UK buys goods from another EU supplier the supplier will zero rate the sale. When the UK company does its VAT return it will include the VAT payable at the UK rate as both VAT due and VAT recoverable.
     
    Posted: Jun 13, 2018 at 8:10 AM By: Scalloway Member since: Jun 6, 2010
    #2
  3. braddo

    braddo UKBF Regular Free Member

    285 22
    Thanks mate! Thats really useful. Much appreciated. I assume it only applies to larger purchases? I mean - I can't go into a shop and say "i'm buying this for my company - please deduct the VAT".
     
    Posted: Jun 14, 2018 at 6:05 PM By: braddo Member since: Oct 9, 2010
    #3
  4. DavidWH

    DavidWH UKBF Enthusiast Free Member

    1,084 182
    What stops someone, using another companies VAT number?
     
    Posted: Jun 14, 2018 at 6:57 PM By: DavidWH Member since: Feb 15, 2011
    #4
  5. Pish_Pash

    Pish_Pash UKBF Ace Free Member

    2,220 546
    the seller is meant to check the buyer VAT number & ship to that particular buyer VAT registered address....

    http://ec.europa.eu/taxation_customs/vies/
     
    Posted: Jun 14, 2018 at 7:21 PM By: Pish_Pash Member since: Feb 1, 2013
    #5