Do I charge VAT?

Phone bought in the UK for EU company's Employee

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A phone was purchased by a UK company for the use of a UK employee of a connected EU company. 

My view on the transaction would be that, In effect, we bought the phone in the UK, reclaimed VAT- and then will be delivering the phone to the UK employee but invoicing to an EU entity that hires this employee- therefore we would charge VAT on the re-charge of the phone to the EU entity (UK delivery). But thent the EU entity will most likely not be able to reclaim VAT via their normal procedure.

Agree/Disagree?

 

Replies (5)

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chips_at_mattersey
By Les Howard
18th Nov 2021 08:40

Sale by UK entity to EU entity is zero rated export. Evidence of export required to satisfy VAT regulations.
EU recipient probably liable to VAT on entry; recoverable subject to the local rules.

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Replying to leshoward:
Caroline
By accountantccole
18th Nov 2021 09:19

Sounds like there is no intention to export?
If phone remains in the UK surely UK VAT will apply like OP suggests

Thanks (2)
Replying to accountantccole:
Enron
By Truecon
18th Nov 2021 10:03

Agreed- Thanks Accountantcole

Phone will remain in UK

Thanks (0)
VAT
By Jason Croke
18th Nov 2021 09:31

I'm with Accountantccole, the phone never leaves the UK, so not an export, not a service (and of it was it'd fall under use and enjoyment rules), so charge UK VAT, if the EU business wants to, it can make a reclaim direct to HMRC (similar to 8th Directive refund).

Thanks (2)
Replying to Jason Croke:
Enron
By Truecon
18th Nov 2021 10:02

Agreed- thanks Jason

Thanks (1)