In mid 2015 I supplied services to an EU company based in Germany. I (perhaps incorrectly) invoiced them and charged U.K. Vat at 20%. They paid the invoice including the vat, and I in turn paid it to UK HMRC.
Now, approx. 2 years later I have just received an email from a South African company working on behalf of my German client demanding that I refund the VAT and pay directly to the South African company's bank account. Am I obliged to do so?
Also, If I do refund the VAT amount, would there be any way of getting it back from HMRC?
Thanks so much for any help.
Replies (16)
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Although an error has occurred, you have never had dealings with the S African company. Tell them to bugg3r off.
You would just show the VAT in Box 4 of your Return, and no need to advise HMRC separately. It is an accounting adjustment, not an error.
Why are you paying the money to the South African company, not the German company? Are you satisfied that this is correct?
Agree that you ought to repay it, that you can probably claim it on your next return and that you should pay it to the German company, not the South African one.
How much are we talking here?
I may be talking rubbish - again - but if you had been charged VAT by the German company you would have claimed it on your UK Vat return wouldn't you?
So why are they claiming it from HMRC and not the German tax authorities.
I may be talking rubbish - again - but if you had been charged VAT by the German company you would have claimed it on your UK Vat return wouldn't you?
So why are they claiming it from HMRC and not the German tax authorities.
In general, no VAT is applied to a transaction between two VAT registered businesses.
Good job I don't do VAT advice then isn't it - although I do remember reading if there was no VAT number supplied you had to charge VAT regardless
That still isn't correct Marion. You need a VAT number in the case of GOODS going to another EU member state; for services you just need evidence that they are a business.
Has happened. Our advice was that this was an error although if the amount of tax is less than £10,000 then it doesn't matter either way. If over £10,000, my 'formal' advice would be to send a correction form to HMRC and await their clearance and refund before remitting to SA. If less than £10,000, just remit and correct. Quotations marks used in the Trumpian sense.