VAT on goods we manufacture in Europe

VAT on consignment

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Hello one and all! Could really do with some basic advice.... 

I have products about to be made in the EU and moved to the UK to a sales agent as consignment stock (customer unknown at this point) title remains ours. We are established in the U.K. Too. Agent just takes margin for efforts. We find the customer etc. I have no VAT experience and of course plan to get advice from an tax acct but I have a meeting tomorrow and could do with understanding if we have to pay the revenue on these imports or if only the VAT the customer pays the agent is due to the revenue? I wondered if the movement between us as one company as we U.K. VAT registered like we are supplying to another business. Hope this makes some sense could really do with some pointers. Many thanks for any views/advice... 

Replies (4)

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By MEDICO
28th Sep 2016 20:57

Thank you very much. I must admit I'm a little lost by it all.

So if we bring in £100,000 of stock from the EU as consignment we would pay the revenue £20,000 as 'acquisition' tax? @ 20% VAT (as use same as if local?) we can then reclaim that? At what point? Thank you and sorry if I'm being stupid and missing something obvious. I am not sure what account for acquisition tax means does mean it's a paper exercise or are we actually supposed to be paying it?

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Scalloway Castle
By scalloway
28th Sep 2016 22:49

Basically it is a paper exercise to please the bureaucrats. You pay it on one box of your VAT return and reclaim it on another.

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Replying to scalloway:
paddle steamer
By DJKL
29th Sep 2016 11:16

scalloway wrote:

Basically it is a paper exercise to please the bureaucrats. You pay it on one box of your VAT return and reclaim it on another.

Just for clarity for the OP the ability of the business to reclaim on the return does depend upon the business having the right to fully reclaim all input tax, this tends to follow the types of supplies it makes (zero, standard, exempt)

However in practice if none of business outputs are exempt I would not expect any issues.

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