Help, I am an inexperienced bookkeeper (recently qualified) doing the books for my friend's homewares shop. She is VAT registered. Most of her stock is purchased from within the EU (Denmark, Sweden etc). Most of her sales are from the UK, with an increasing proportion from EU and non EU countries.
I just want to confirm that my understand of it so far is correct?:
VAT on Purchases
from EU business with VAT number - zero rated
from EU customers with no VAT number - 20% VAT
from the UK - 20% VAT
from outside the EU - might not pay VAT if outside the scope / customs / import duty?
VAT on Sales
from EU business with a VAT number - zero rated
from EU customers with no VAT number - 20% VAT
from the UK - 20% VAT
from outside the EU - might not pay VAT if outside the scope / customs / import duty?
Am I correct???
Also, most of her sales invoices for non UK sales show TAX as ‘£0.00’. Does this mean that for an EU sale I am supposed to add 20% on top or account for it as though it’s already included? Ie. The subtotal is £100 – so, should VAT be £16.67 (83.33+16.67) or £20 (100+20)?
I would be so grateful for an answer on the above. Thank you.
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Replies (7)
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Purchases from outside will have VAT charged on entry to the UK. You need a C79 to reclaim it.
You need to account for acquisition tax on EU purchases on your VAT but you can reclaim it.
EU sales with a valid VAT number are zero rated.
Sales outwith the EU are zero rated.
More information here
https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-a...
https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-...
You should also check the Distance Selling rules for B2C sales within the EU, as there may be a liability to register in other Member States
EU suppliers with no VAT number = no VAT
From the UK = depends on supply or if supplier is VAT registered
Dependent on figures might also need to do an EC sales list and Intrastat returns.
I am a Business seller on eBay. I had my account hacked in April & have been tipped over the VAT threshold by the fraudulent sales accrued in the 6 hours it took to fix. I have registered for VAT, as my account was blocked otherwise & I was refused listing privilages until I did. My question is, I have £61,000 of sales in the UK & approx. £20,000 in the US & Australia. I know this is under the VAT threshold, but, for future reference, do I pay VAT on items I sell through eBay to the US & Australia? I only purchase through UK online auctions.
Zero rated sales to places outside the UK are included in your turnover for VAT registration purposes. But any fraudulent sales made by a third party should be excluded.
