EU VAT refunds

EU VAT refunds

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Forgive the lack of knowledge; I have been mugging up on EU VAT and flat rate schemes.  I'd love some pointers.

My client has run a number of training workshops in EU cities.   These are EU B2B supplies of services, falling under the general rule (training is not admissions based; and not an exempt educational supply).  There is a twist: one of its customers is an EU body which presents a certificate so that my client will zero rate its training supply.  This is a VAT free sale.

Do either of the following prevent refund?

  1. Client being registered in the UK under the Flat Rate Scheme  - no separate input UK VAT would be recoverable on UK travel and subsistence costs - can EU VAT on, say, hotel costs be reclaimed?  I can't see EU refunds being expressly ruled out for FRS registered businesses.
  2. The EU VAT being incurred in the course of providing training to a VAT 'privileged' institute.    The customer is not locally VAT registered, because of its privileged position, and does not have to pay UK VAT (it provides a 'certificate of entitlement' to be free from VAT on its purchases) 

For 2. I've spotted the requirement at .gov.uk that EU VAT may be refunded provided no supplies are made there, unless the recipient of the supplies pays VAT on them (clearly the certificate means they don't)

Finally, is it actually worth the hassle of registering and reclaiming EU VAT refunds?   Daft question for future: do hotels zero-rate if UK businesses supply their VAT reg no?

Many thanks if you're kind and bold enough to reply.  Jim

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By Steven16
05th Dec 2014 00:15

I don't know the answer to this but I am quite interested to find out. I don't think there is anything stopping you if you are zero rating the supply as you say, however, I'm not sure this is your normal zero rated supply.

I am interested to know if in that situation it is even still B2B. If the customer isn't locally VAT registered or required to be then surely they aren't a relevant business person, and the supply would fall into B2C? And possibly UK VAT would apply. Does the cerificate apply to the whole of the EU?

Might help, couldn't see anything for FRS:

https://www.gov.uk/government/publications/vat-notice-723a-refunds-of-va...

As far as I am aware a hotel won't ever zero-rate, will just charge as normal. The place of supply will be wherever the hotel is because of the land exceptions so couldn't zero rate for reverse charge either.

Hopefully someone with a bit more knowledge than me on the subject will come to your aid.

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