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VAT charged on a supplier invoice from an EEC country

Ruth Spanner
  • 16 posts
  • # 109674

Hi

Does anyone have experience/advice they could give on how you deal with VAT charged on supplies from an EEC country?

And how do you show it on your VAT return? I thought I had done it correctly but it was disallowed - then HMRC explained why and pointed us to one of their forms and I still thought I had done it correctly!

Can you get the supplier to give you zero rated invoices in future if you supply your VAT number? And perhaps ammend the one they have already given us.

Thank you!

Ruth Spanner
  • Member PM.Dip
  • Practice Licence
  • 35 posts
  • # 109680

Hi Ruth

In order to receive a zero rated VAT invice within the EU, your client needs to supply their VAT number to their supplier. The supplier may be prepared to issue a replacement invoice for the one already supplied, that is up to them. If they won't reissue it, unfortunately you have to show the VAT charged as unclaimable, as it is not UK VAT.

However, this does also depend on what is being supplied, as certain goods are subject to reverse charge and have to be dealt with accordingly - but, the invoice should have stated this, if this were the case.

HMRC's website used to have quite a useful section about this, not so sure what it's like since they moved it to gov.uk, but worth having a look!! They also run webinars about EU/foreign transactions, which again can be quite helpful.

Helen
Ruth Spanner
  • 16 posts
  • # 109681

Hi Helen

Thank you for your reply, that's very useful.

I will go and trawl through the HMRC website again. I am looking out for a relevant webinar too.

(It is trees to be planted on a farm - the farm will go on to produce truffles and wine.)


Thanks for taking the time.

Ruth
  • Member PM.Dip
  • Practice Licence
  • 35 posts
  • # 109684

Hi Ruth

Sounds a very interesting client!

Ok, for some reason I had assumed we were talking services rather than tangible goods - in that case they are deemed to be acquisitions and are dealt with according to https://www.gov.uk/vat-imports-acquisitions-and-purchases-from-abroad

No idea if that link will work, but hopefully you can copy & paste even if it doesn't provide a link!!


Helen
Ruth Spanner
  • 16 posts
  • # 109687

Hi Helen,

Thank you. Yes, this is what HMRC said in their letter. But when I check where they told me to refer on the HMRC website and to that link you gave me, it said that:

"This VAT is known as acquisition tax and you can normally reclaim this if the acquisitions relate to VAT taxable supplies that you make."

Which was why I couldn't understand why it was disallowed. Am I missing something?

 

Ruth
  • Member PM.Dip
  • Practice Licence
  • 35 posts
  • # 109688

Ok - strange question time, what type of trees is it?

I'm suspecting that maybe their reasoning is that it is a type of tree that is zero rated in this country, which I think means you can't claim anything, as per "You’ll need to pay VAT at the same rate that you would have paid if you had acquired them from a UK supplier."

However, HMRC are perfectly fallible, so let's check Laughing
Ruth Spanner
  • 16 posts
  • # 109691

Hi Helen

They are Truffle trees - Quercus pedonculata tuber magnatum/pubescens tuber magnatum charged at 10% French TVA and then shipping charged at 20%.

How do you find out whether they are vatable here?

Thank you again!

Ruth
  • Member PM.Dip
  • Practice Licence
  • 35 posts
  • # 109692

Hi Ruth

Ok - I know absolutely nothing about truffle trees Undecided

VAT Notice 701/38 https://www.gov.uk/government/publications/vat-notice-70138-seeds-and-plants/vat-notice-70138-seeds-and-plants gives the information about seeds & plants - probably unsurprsingly, they don't have their own entry!

The Trade Tariff for truffles https://www.gov.uk/trade-tariff/commodities/2003901000 gives them at zero rated for import, but I do appreciate that it is not the truffle itself!

I suspect that they would say that they fall under 'Plants, bushes and trees that are normally used in this country for the production of edible fruit are zero-rated.'

Hopefully these will help a bit - sorry there is nothing more definitive!

Helen
Ruth Spanner
  • 16 posts
  • # 109713

 

Hi Helen

Thank you so much for all those links and all your advice. 

I think I will have to look into this further - truffles are not like fruit, the trees are just the host - so it seems a bit of a grey area to me. 

Am I right in thinking that my client can't ask the supplier to zero rate the goods afterall - that that is just for services rather than acquisitions?

Thanks again,

Ruth

 

 

 

 

 

 

 
  • Member PM.Dip
  • Practice Licence
  • 35 posts
  • # 109716

Hi Ruth

No, I do appreciate that the tree's don't bear fruit, however because the reason for them being there is linked to the production of something that will enter the food chain, I suspect that may influence the chance of them being zero-rated here. However, that is pure assumption on my part, and I would agree that it is a grey area.

The Trade tariff is the really relevant document here - however, are the trees already here? If so, they probably have already been categorised under the trade tariff, which will be dictating their treatment for VAT Undecided If this is the case, you need to have a look at the import documents and find the classification that is on there, and then find that in the tariff. https://www.gov.uk/classification-of-goods gives a bit more info about the tariff, and has the link to the start of it.

Acquisitions can't be zero-rated, that's correct.

Let me know how you get on - I'm quite intrigued by this one!

Helen
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