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Post Brexit Input VAT re-claim Query

Post Brexit Input VAT re-claim Query

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We deal with few EU based Online Suppliers/Retailers (France & Denmark) and they are both VAT registered in their own country. 
They have been supplying good to us- (UK VAT registered company) through their website as they are only storing their goods in their respective countries and Not in the U.K

Since Brexit, we now have the dilemma about re-claiming the Input VAT  as they are not U.K VAT registered and also are not willing to Zero rate their sales Invoices.
Their explanation so far is that they are predominantly  B2C business and not a B2B model and therefore they claim that they are under no obligation to zero rate their Invoice and are continuing to charge VAT based on their country VAT% rate.

So, before we make the decision to stop purchasing from those suppliers, may I ask if they are in fact correct in their Tax Obligations ?
Also, is there a way for us to reclaim the Input VAT on all those purchases past 1st January 2021 until now using EU 13th Directive or any other way?

I would really appreciate your response.

Many thanks
 

Replies (3)

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chips_at_mattersey
By Les Howard
14th May 2021 20:14

Many EU businesses assume that, if their UK recipient is not registered for VAT, they cannot zero-rate. (Exempt in EU law)
I am not convinced that this is the correct application of EU law, but it is not always easy to convince them, as it leaves them vulnerable to local VAT assessment.

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Replying to leshoward:
blue sheep
By Nigel Henshaw
16th May 2021 07:31

But the OP is VAT registered, so this is a clear B2B export of goods which should be zero rated

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Jason Croke
By Jason Croke
17th May 2021 08:36

I take from the OP that they are buying goods directly from EU retailer websites, these websites may not be geared up for differentiating between consumers (B2C) and businesses (B2B).

When any business outside the UK is selling to consumers in the UK, they are required to register for UK VAT and charge UK VAT.

The supplier has totally misunderstood the law, the UK is no longer in the EU.

Even before Brexit, the EU rules were if you sold to someone outside the EU you could zero rate (eg France to USA) so their explanation is nonsense because they wouldn't charge VAT to consumers in India or Australia (or if they do that too, then they really don't understand VAT). Sounds like the supplier is still treating the UK as if it is in the EU.

You can attempt to make a 13th Directive reclaim with the EU tax authority where the supplier is based, they might process or they may take a view they cannot refund the VAT because it was charged incorrectly in the first place, so its worth submitting a claim but don't rely upon a refund in your business plan/margins.

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