Chartered Accountants and Business Advisors

VAT and supply in the EU

1/4/2010 POSTED BY BJW

In January 2010, the rules relating to the charging of VAT for services sold into the EU changed. The basic rule is now that VAT is determined by where the recipient resides rather than the provider. However, there are a number of exceptions which need to be reviewed in detail. For services, VAT does not generally have to be charged if there is a perceived export of the services, but only in the case where the recipient of those services is a business user. There is no actual requirement to quote the recipient’s VAT number on the invoice, as is the situation with goods, but this does assist. Otherwise, where a VAT number is not quoted, the provider needs to have sufficient detail to justify that he is making supplies to a business rather than to an individual privately.

TAGS: VAT

VAT Matters

2/11/2009 POSTED BY BEN

A number of issues have caught my attention over the last few months relating to where VAT should be charged.

1. Intercompany charges: Where management charges are levied between businesses – these generally should be VATable where the seller is VAT registered. Sometime where the seller is exempt or not registered – the addition of a taxable supply like management charges can mean that they should be registered – care needs to be taken.

2. Disbursements – the general rule is that where expenses are recharged to customers – irrespective of whether the original cost incurred VAT (such as travel) the recharge should carry VAT. There are exceptions - but that is the basic rule.

3. Recharging employment costs – likewise, generally if recharges of salaries etc are made – VAT should be charged. Again, there are many exceptions but this is the general rule.

4. In 2010 the rules will be changing in relation to some services sold and purchased within the EU and the regulations as to how VAT should be charged will be amended. If you do buy and sell services now is the time to consider whether the changes will have an impact on your business and you should consider the impact of these changes now.

VAT was meant to be an easy to understand tax – it is probably the most complicated of all the taxes when it comes to dealing with everyday matters and very often the common sense answer is far from the legal requirement. Always ask a question when something out of the ordinary occurs – never assume. I am of course happy to answer your questions.

TAGS: VAT TAX

VAT Back Up

1/11/2009 POSTED BY BEN

The VAT rate reverts to 17.5% on January 1st 2010. Details of the rules relating to the changes can be found on all 45 pages of the HMRC guidance at:

www.hmrc.gov.uk/vat/forms-rates/rates/rate-rise-guidance.pdf

For most traders the change will not be complicated – but there are special provisions
for situations such as:

1. Continuous services

2. Deposits

All registered traders should review the guidance and if specific assistance is required please call with your enquiries

TAGS: VAT TAX