Help, I am trying to get to grips with how to account for VAT on foreign sales. Most of my Client’s sales invoices for non UK sales show TAX as ‘£0.00’. Does this mean that for an EU or non EU sale I am supposed to add 20% on top, or account for it as though it’s already included? Ie. The subtotal is £100 – so, should VAT be £16.67 (83.33+16.67) or £20 (100+20)?
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What is he selling?
Are his customers in the EU and outside the EU?
Are his customers in business? If so, have they provided VRNS, or other evidence of business status?
For non business EU sales you need to account for VAT as normal, ie 20% of the net price.
For sales outwith the EU the payment received is zero rated.
The EU customers either give you a foreign VAT number or they should be charged at 20%.
So the answer to your question is the VAT is £16.67.
The non-EU customers pay no VAT - you just need proof of export.