FRS and EU sales
I'm getting myself pretty confused about whether a client should be including sales of an IT service to an EU country as sales for the purposes of the VAT Flat Rate Scheme.
This is what is causing my problem:
Your flat rate turnover is all the supplies your business makes including all:
- VAT inclusive sales for standard rate, zero rate and reduced rate supplies
- sales of exempt supplies, such as rent or lottery commission - you don't have to make any partial exemption calculations
- sales of capital expenditure goods - unless you have previously reclaimed the VAT, in which case they must be accounted for at the standard rate and not the flat rate.
- sales to other EU countries
- sales of second-hand goods - but if you sell a lot of these, you may be better off leaving the Flat Rate Scheme and using a margin scheme
- services you've purchased from outside the UK that you've had to reverse charge
- disbursements - costs you pass on to your clients that meet the necessary VAT conditions
- private income, for example income from shares
- bank interest received on a business account
- the proceeds from the sale of goods you own but which have not been used in your business
- any sales of gold that are covered by the VAT Act, Section 55 - see the link below
- non-business income and any supplies outside the scope of UK VAT
- sales of capital expenditure goods on which you have claimed back the VAT you paid
Though when I look to see the place of supply here: (http://www.hmrc.gov.uk/vat/managing/international/exports/services.htm) sales of IT services to a business customer appear to be outside the scope of UK VAT. So according to the above I should be both including and it and not including it. So two questions do you include it in the return and do you charge it to the customer?
I've seen previous threads come down on one side or the other but not addressing this contradiction above.