Penalties for missing VAT number

Penalties for missing VAT number

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I wonder if anyone could tell me what the penalties are for missing a customer VAT number from an invoice for goods sold to the EU.

The customer VAT number is held, but was not entered in the customer record,

Thanks and regards,

Replies (8)

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By Hansa
14th May 2012 18:05

Not 100% sure but....

The danger is that if you have an inspection it could be held that the sale wasn't properly recorded and that you should have charged 20% (as if you were supplying to a consumer).  This would of itself attract penalties as well as the "missing" VAT.

My (informal) suggestion would be

(1) Reissue the invoice now (with the original date) and with the VAT no. 

(2) Send the replacement to the customer asking them to substitute it. 

(3) Ensure you have validated the customer's VAT number (http://ec.europa.eu/taxation_customs/vies/) and keep a print-out with the copy invoice.

 

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By tom123
14th May 2012 21:18

Thanks, that seems a good approach.

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By shaun king
15th May 2012 14:47

missing VAT number

Generally HMRC would not seek to penalise a taxpayer for this type of error but would insist a new invoice is issued showing the customer VAT number. However, you MUST issue a credit note against the original invoice and issue a new invoice not just re issue the original tax invoice.

Another point is that how did your client record the sale on his EC Sales list if he didn't record the VAT number on the sales invoice?

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By tom123
15th May 2012 16:18

Update

Funnily enough it is the process of preparing the EC sales list that revealed the gap...

 

As it turns out, the doucment sent to the customer declared the VAT number, whilst the system invoice did not.

Specific requirements (due to a letter of credit etc) necessitated a 'manual' style of invoice.

 

Thanks again,

 

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Replying to Kent accountant:
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By Richard Willis
17th May 2012 22:18

Not sure what the problem is with the overseas end!

tom123 wrote:

As it turns out, the doucment sent to the customer declared the VAT number, whilst the system invoice did not.

Specific requirements (due to a letter of credit etc) necessitated a 'manual' style of invoice.

 

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By Richard Willis
15th May 2012 22:43

tom123

If the invoice sent to the customer recorded their VAT number it complied with the rules.  Presumably the method of its production (?Word) could reproduce it so it could be deemed an electronic copy.

As long as the return figures were OK (i.e. correct tax code used in software) no inspector of my experience (30 years of originally annual inspections) would be bothered.  I have manually written the VAT number on office copies before now!  Our sales people were notoriously bad at obtaining them.

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By shaun king
16th May 2012 16:35

Richard

 

Unfortunately there are two sides to VAT accounting - the supplier and the customer and having spent the last 6 years advising companies all over the EU I can say that HMRC are the most lenient towards minor irregularities. However, the same cannot be said of the Italian or Bulgarian authorities were the penalty regime and compliance requirements are onerous. If the customer doesn't get the correct documentation it causes all sorts of problems and can sour relationships between supplier and customer.

 

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By Hansa
16th May 2012 21:06

I agree with Shaun King

That is why I suggested in my opening comment (2) that the customer should be sent the revised invoice and asked to substitute it (assuming no inspection had taken place).

The "new" EU members (Eastern Europe) I find are the most officious (ah, but para 7, subsection B(3) f says .,... ) .  However I've always found Cyprus (and Malta) easy to deal with - more so than the UK but I suppose this is individual experiences.

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