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Global accounting scheme, do new goods qualify?

Do New goods qualify under the global accounting scheme?

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A client bought some goods from a VAT registered business via Amazon the goods purchased were new and listed as such but the business issued an invoice stating zero VAT and citing the Global  Accounting Scheme (VAT Notice 718) as the reason VAT had not been charged. As far as I am aware only second hand goods are permissible under the scheme. Any advise would be appreciated.

Thanks, Jason

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chips_at_mattersey
By Les Howard
15th Feb 2020 12:24

There is definitely a discrepancy in the information provided to your client!
If the vendor has supplied goods under Global Accounting, they must be 'used,' not 'new.' I agree that only used goods are eligible under GA.
The choice is: do you rely on the Amazon listing? or the seller invoice? Which is more accurate?

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Replying to leshoward:
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By ekim
15th Feb 2020 16:09

Many thanks for the reply Les. That is the answer I expected except I never considered the goods may have actually been used and accidentally listed as new. I was told that the same business has thousands of "new" products listed via eBay, I have checked this out myself and indeed they do. Listings also say new, but say, "THIS PRODUCT IS TREATED IN ACCORDANCE WITH THE GLOBAL ACCOUNTING SYSTEM, INVOICE IF REQUESTED ON THIS ITEM WILL SHOW ZERO VAT" So I am tempted to think it is evasion rather than incorrectly describing used goods as new.
Thanks, Jason

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RLI
By lionofludesch
15th Feb 2020 17:59

Margin schemes are unlikely to be advantageous where the trader's customer or supplier are themselves VAT registered.

I get this a lot with vans.

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Replying to lionofludesch:
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By ekim
15th Feb 2020 20:58

Thanks for the reply, I think I now have a better understand what is happening after looking at the goods sold. The original goods are purchased from a vat registered company in the EU (assumed from the brand name which is registered to a Company in Germany) so correctly zero rated when supplied to the vat registered business in the U.K. And I am satisfied that the goods are new (electrical items). The uk business then wrongly identifies the goods as qualifying goods under GA and zero rates the goods.
This of course results in a much lower effective VAT rate.
Am I correct in thinking this would not be allowable?
Thanks, Jason

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Replying to ekim:
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By ekim
19th Feb 2020 20:05

Hi all,
I've today had confirmation from a HMRC VAT Technician. The Global Accounting Scheme is as thought only for used goods.
Thanks for the replies.

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Replying to ekim:
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By JoF
19th Feb 2020 20:12

Dont mean to be rude, but you had your answer from a VAT EXPERT, ie Les, so at a loss as to why you would go and ask someone who I can guarantee will know less and who will take HMRC's stance, as opposed to the legal stance.

Lost for words (apart from the above!)

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Replying to JoF:
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By ekim
19th Feb 2020 21:20

That's a fair comment and not rude at all. If I'm honest I already knew the answer before I posted, but lack the bit confidence I know I should have on the subject by now.

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