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VAT for EC Member States - Non-UK Established Businesses

Dear all,

I am really very confuse with the Removal of the Threshold for Non-UK Established Businesses, from 1st December 2012. I have asked HMRC by calling through their helpline but i always get different answers, can anybody help me.

Question - 

1. If a Non-UK Established Businesses is based in Spain and registered for VAT in Spain than do they need to register for UK VAT if they supply goods in the UK

2 And what is the Non-UK Established Businesses is NOT registered for Spanish VAT.

One party from HMRC is saying that they do not need to register for VAT until they reach the threshold of £70,000 and 2nd party is saying no they have to register and NO more threshold available.

????????????? confused 

Replies

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It depends

Hi there

The position does appear to be confusing, but VAT (with no registration threshold) will only apply to supplies made in the UK.  So if, for example, the Spanish VAT registered business sends goods to to the UK, to a VAT registered buyer, the place of supply is Spain and the customer declares the VAT as an acquisition.  However if the Spanish business brings goods here to sell, for example in a warehouse, to supply to various customers, or at a fair or market, they have to register and charge UK VAT.

I would still think that a call off warehouse for a particular customer to draw stock from is still OK, in other words the customer can declare an acquisition as the goods are removed, with no UK registration need for the supplier.  But I would welcome any comments on this as I am not 100% certain.

Supplies of goods from Spain to UK non registered customers are presumably still Spanish sales until the UK distance selling threshold is breached (which I believe is £70,000).

Here is the HMRC brief

http://www.hmrc.gov.uk/briefs/vat/brief3112.htm

Hope this helps

Thanks (1)
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29th Jan 2013 19:40

In order to answer your questions you need to clarify 'If a Non-UK Established Businesses is based in Spain and registered for VAT in Spain than do they need to register for UK VAT if they supply goods in the UK'

By this do you mean the goods are brought into the UK before being allocated to a customer order or have they been allocated to a customer order in Spain and are just being shipped to the UK company against a UK VAT registration number. 

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04th Feb 2013 13:41

VAT

As per my understanding i think there can be the 3 case as follows: (for the VATable supplies from EU states)

 

1 If a spainish VAT reg co. supply to UK VAT reg companies/business than they do not need to charge Spanish VAT and neither they need to register for VAT in UK. it is going to be 0 rated?

2 If Spainish VAT reg company or business selling to UK non VAT reg company or business than they will charge spainish VAT until they reaches the threshold of £70,000 and than after crossing the limit of £70,000 they may start charging UK VAT (but i don't know what are they going to disclose in spain, double VAT Treaty?)

3 Ans if spainish co/business non VAT reg in spain, selling good to anyone(business/co/individual) in UK, they need to reg for UK VAT after crossing the threshold of £70,000?

 

My understanding is based on distance selling rule(where Non-UK Established Businesses rule can be ignored)

??

 

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04th Feb 2013 14:50

I agree with all of the above!!

Thanks (1)