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Non EU suppliers quoting VAT reg numbers starting 'EU'

  • Member PM.Dip
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  • 9 posts
  • # 115976

I'm hoping someone has come accross this as I have this month with 2 seperate clients.

They both bought software from a USA & Canad supplier respectively.

Both invoices were in Sterling with VAT @20% added and both give a supplier's VAT reg no beginning 'EU'. Neither asked for my clients VAT reg no.

Both clients thought they could reclaim this and one was not pleased when I disallowed it as the amount was significant.

Discussing at my local branch meeting the concencus was that I could treat it as a 'reverse charge' but I'm not convinced.

HMRC website is not much help and when I Googled the EU reg number I got some forum in Spansih going back to 2013 - but it seems someone there had the same query.

I'd like to be absolutly sure when I go back to my disgruntled client but I've never seen this befoe in nearly 20 years of doing VAT!

Thanks for any help forthcoming!

Peter The Bookkeeper

  • Member PM.Dip
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  • # 115977

Hello Peter,

That is an interesting problem you have found.

I've had a look on the web and found some more information regarding this,
that might help. It looks like it is to do with MOSS, where the place of
supply changes for eServices and non EU suppliers have to register for VAT
for sales to EU consumers. But for B2B the rules don't change and hence no
VAT should be applied.

Forum discussion on accountingWeb -
https://www.accountingweb.co.uk/any-answers/eu-vat-charged
HMRC document that might apply -
https://www.gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg01350
The notice mention in the forum -
https://www.gov.uk/government/publications/vat-notice-741a-place-of-supply-of-services/vat-notice-741a-place-of-supply-of-services#sec15

Have you tried calling the ICB VAT helpline?

Hope this helps, and let us know how you get on.
Torben

Edited at 23 Nov 2017 11:29 AM GMT

  • Member PM.Dip
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  • 9 posts
  • # 115980

Thanks Torben - that's exactly it! (and I have come across a 3rd case today!)

Clearly all 3 transactions have been processed by the supplliers as B2C transactions and as such I am happy my advice to the clients not to reclaim the VAT charged WAS sound.

And I am now going to back this up with further advice that in future they need to prove to the supplier that the tranaction is B2B, and to check when the order is confirmed that no VAT will be charged on the invoice.

Something new learned. Thanks again



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