Irish Consignment stock in UK- do we charge VAT ??

We supply consignment stock to ROI ( held in UK) then once sold by us a commn chg

Didn't find your answer?

We have a customer in ROI , we charge them for products we make in the UK on their behalf but are held by us, we sell them to individuals from UK Company ( charge vat where applicable as we are making the sale) then they charge us commission ( effectively the original charge plus mark up) 

Do we raise the invoice to them with UK Vat ? or can we zero rate the supply? 

If we can zero rate the supply we would offset this charge against their commission invoice before paying.

Another view point may be that we are using their brand to create and sell their products so they should charge us a net commission only from ROI ( services) and we agree that if product we manufacture that is not sold will be offset by a reduced commission.

Looking to get this correct as they cannot reclaim the UK vat if we charge them and hold on consignment until sold.

All help appreciated 

 

 

 

Replies (9)

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VAT
By Jason Croke
05th May 2022 11:12

Consignment stock would usually mean the stock belongs to the RoI and when the goods leave the UK warehouse, it is the RoI that is making the sale and so the RoI must register for UK VAT.

You need to establish the precise facts here. You say "you charge them (RoI) for the goods you make" so that indicates title/ownership of the goods changes hands in the UK, but then you say you charge UK VAT as you are selling the goods to the UK customer...so what is the actual situation?

You then say "they (RoI) charge us a commission"....so is the reality that you make something, you sell it as your own sale and then you pay a fee to the RoI for like a royalty to use their logo or something?

Your last paragraph then says you are holding their (consignment) stock and you don't want to charge them VAT as they (Roi) cannot reclaim UK VAT....so it is all a bit confusing to me as to what is actually happening .

As ever with VAT, who owns the goods? As the goods are clearly in the UK in a warehouse and also sold to a UK customer, then UK VAT is certainly in play, just a question of who has to charge VAT - you or the RoI or both.

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Replying to Jason Croke:
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By Maharg51
05th May 2022 15:45

Jason

Thank you , re -reading this it is not clear. We did previously have consignment stock and we fulfilled orders with vat and were charged for the consignment stock with vat. Like a profit share based on sales.

This is the most accurate scenario now
You then say "they (RoI) charge us a commission"....so is the reality that you make something, you sell it as your own sale and then you pay a fee to the RoI for like a royalty to use their logo or something? -

So they will charge us for commission/royalty - not sure of the best wording but effectively a profit share based on what we sell at less our costs.

If we have over manufactured and not sold all product we would ship back to them in ROI and charge.

Thank you

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RLI
By lionofludesch
05th May 2022 11:43

Thanks to both of you for not saying Southern Ireland.

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Replying to lionofludesch:
VAT
By Jason Croke
05th May 2022 12:03

lionofludesch wrote:

Thanks to both of you for not saying Southern Ireland.


I know it's a trigger!
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Replying to Jason Croke:
RLI
By lionofludesch
05th May 2022 12:10

Jason Croke wrote:

I know it's a trigger!

Nobody says "North Sudan" or "Southern Cyprus"or "Eastmeath" or "East Viginia" ..........

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Replying to lionofludesch:
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By Hugo Fair
05th May 2022 12:48

Actually you do if you live in the polar opposite country (at least for the first two of your exemplars).

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Replying to lionofludesch:
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By Brend201
06th May 2022 17:36

Or "Eire".

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VAT
By Jason Croke
06th May 2022 08:58

Commissions or royalties are a service, the place of supply of services is where the customer is, so in theory the RoI business should invoice you for their cut/commission and their invoice to you would be outside the scope of Irish VAT (no VAT) and you would reverse charge that invoice on your UK VAT return (declare UK VAT at 20% as output tax and then reclaim the same as input tax, assuming you are not partially exempt).

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Replying to Jason Croke:
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By Maharg51
06th May 2022 19:24

Jason

This is much appreciated. Makes it clearer and thank you for the advice , really helpful .

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