Anonymous
Share this content
4

EU Intracommunity VAT no. query - is this correct?

Does this sound right to you?

Didn't find your answer?

I have a (sole trader) client who is not VAT registered and is not required to be as his taxable turnover is under the registration thresholds.  

He's about to do some work for a client in Spain and part of the conditions of payment by the Spanish client are that he has to provide a Tax Residency Certificate to avoid the deduction of local taxes, which is obviously fine, but they are also requiring him to provide a European Intracommunity VAT number and have advised they will not process invoices or payments without one.  They are also suggesting that this obligation is enforced by "the European Tax Authorities" and is not therefore up to their discretion to make any exceptions.

Does this sound right to you worldy wise people out there??  My client needs to register for VAT in the UK, to be able to invoice and receive payment from a client in Spain, when the invoice will be for B2B services and therefore not actually attract a VAT charge anyway?  And in the meantime, will have to start charging all his UK clients VAT and go through the rigmarole of MTD compliant VAT returns...

It all seems a bit bonkers to me...!

Replies (4)

Please login or register to join the discussion.

avatar
By WhichTyler
25th Jan 2020 09:18

Subject to the answer to JoF's question and being sure of their ground in these particular circumstances, your client can:

1. Argue the toss with the potential client, escalate it, get their professional advisers to discuss it with the clients's, persuade them to change their procedures (which may be there for other reasons too), then proceed without the vat problems

2. Increase the price to this client to (partly?) offset the additional cost of being vat registered

3. Turn down the work

Thanks (0)
My photo
By Matrix
25th Jan 2020 09:24

Under Spanish rules if he is unable to provide a VAT number then they have to charge VAT so option 4) is surely to pay the Spanish VAT if the client doesn’t want to register here.

If you do a search then this comes up all the time.

https://www.accountingweb.co.uk/any-answers?search=Spanish%2Bvat#block-s...

Thanks (0)
Replying to Matrix:
avatar
By Wanderer
25th Jan 2020 09:35

Quote:

Under Spanish rules if he is unable to provide a VAT number then they have to charge VAT so option 4) is surely to pay the Spanish VAT if the client doesn’t want to register here.

I read it as the OP's client is UK based and they are supplying services to the Spanish business.
Thanks (0)
avatar
By Wanderer
25th Jan 2020 09:30

Had this before, with Spain as well.
They don't seem to understand that there is no need to be VAT registered in the UK if you are under the registration limit.
Get the client to point this out to them. In my case after a couple of months they withdrew the requirement for UK business suppliers and even supplied a template for UK suppliers to sign and return.

Thanks (0)
Share this content

Related posts