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VAT registration necessary?

Is VAT registration necessary?

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Hi all, would you mind giving me your views on the below issue. I'm trying to figure out whether my client needs to register for VAT in the UK.

The background:

Currently, client is not VAT registered.

They sell digital services across the UK, EU and outside of EU. 

The amount sold within the EU is less than EUR 10k each year, and therefore they don’t have to register for MOSS.

The services they purchase are purchased from EU (both VAT registered and non-VAT registered businesses) and non-EU businesses. All categories of these purchases are below £85k individually, but when combined, and added to sales would be above £85k. 

The question is which of these categories have been be included in the comparison to the £85k threshold. I believe I'm correct on the top 4 categories, but I'm not sure about the bottom two:

1. Sales made in UK – I’m clear that these are to be included

2. Sales made in EU - I'm clear that these are not included

3. Sales made outside of EU - I'm clear that these are not included

4. Purchases from VAT registered EU businesses - I believe these would be included, due to the reverse charge

5. Purchases from non-VAT registered EU businesses - I'm not sure on whether these would be included, due to the reverse charge

6. Purchases from outside of EU - I'm not sure on whether these would be included, due to the reverse charge

Thanks

Oliver

Replies (3)

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chips_at_mattersey
By Les Howard
09th Jan 2019 17:05

Sales made to EU and non-EU are excluded if the customers are in business.
Purchases from EU and non-EU suppliers are added to your taxable supplies for registration purposes.

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Replying to leshoward:
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By ocooper
09th Jan 2019 17:21

Thanks Les. Can I please just clarify, what about the purchases from EU suppliers who aren't VAT registered - are these also added to taxable supplies for registration purposes?
Thanks

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Replying to ocooper:
chips_at_mattersey
By Les Howard
10th Jan 2019 12:02

Yes, it is irrelevant that the supplier is not registered.

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