Cross-border VAT online

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Nigel Harris highlights some of the problems that can occur with cross-border VAT issues when filing online.

The standardisation of the VAT treatment of cross-border business-to-business supplies of services from 1 January 2010 has thrown up some misunderstandings among businesses and their advisers, including some accounting software providers.

Generally, such supplies are treated as being made in the customer's country, and are therefore outside of the scope of UK VAT. There are now only limited exceptions to this rule, for example:

  • Land-related services
  • Passenger transport
  • Entry to events
  • Restaurant services and catering
  • Short-term hire of a means of transport.

In theory such supplies do not belong on the supplier's UK VAT return, b...

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17th Feb 2010 12:13

Cross border VAT issue

Yes - VAT has suddenly become complicated for my business which provides consultancy services to some EC customers. We also purchase some services from EC. Recently 3 colleagues registered online for a conference to be held in France. They paid by company credit card and were charged French VAT at 19.6%. I queried this with the organisers, who assured me that they must charge VAT as the event was being held in France. Interestingly, another conference in the Netherlands is not charging VAT for attendees from outside the Netherlands! It seems everyone is confused.  For the French conference, I used the T24 code on Sage ( std rated purchases of services from suppliers in the EC), and posted a credit card purchase as a bank payment in the usual way. Sage didn't much like this, saying I should not have used that VAT code, but posted it anyway at the full £ value paid with zero VAT. On my VAT return, Sage "grossed up" the purchase by 17.5% and the resulting tax appeared as VAT on a sale in VAT Box 1 and as VAT on a purchase in VAT box 4. The amount I actually paid for the conference also appeared in VAT box 6 and Vat box 7. So the net effect on my VAT return was zero. Comments on whether this was correct are welcome, before I try to explain all this to Sage support.

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By Nevill
17th Feb 2010 12:43

Cross Border VAT - French Conference

We use Quickbooks and not Sage, but we have the same problem, one of our staff has been invoiced by a UK based company but with a French TVA number and they have charged 19.6%.

The company sent a leaflet from a company who will reccover the French TVA for £65.00 plus 10% of the recovered amount, which would be more than the TVA !

I spoke to HMRC who suggested we register for VAT EU Refunds on line and fill in a form which we have to send to the French equilvent of HMRC.

If anyone knows of a better way, or of how we deal with it in Quickbooks, please advise us.



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