Squizz

Can someone help me with a question on VAT?

We're charging an American company for some work, and that'll include VAT. I'm assuming they can't claim that back...

So currently we're kinda losing 17.5% on our charges - If you get my drift.

Anyone?

ChrisB

http://www.hmce.gov.uk/business/impo...repayments.htm

Any use?

P20SPD

iTrader: (1)

chrisb, that is if the company you are "selling" to is situated in the European community.

IIRC when dealing with companies situated outside the European community, you do NOT charge them VAT, as long as the products/services are consumed in the country outside the EC.

But as ever with VAT (such a bloody minefield) each case can have a different answer, it just depends on the specifics really.

Ring the VAT helpline, look on chris' link above, it will be there somewher.

Squizz

Cheers Chris...Next question:
Would an American company buying our design skills and HTML be classed as buying goods for export?

Squizz

P20SPD - Right, thanks.

I guess then in that case we need not charge them VAT, as the design/HTML will be "consumed" at their end and added into their own sites. Their services are tailored purely for the American market, so no part of that can be "consumed" in the UK.

"Do I not like this..."

Nixs

You don't charge VAT to a US company for products they are buying from the UK. It's coded as T5

Squizz

Thankyou...

Dunk

iTrader: (1)

P20SPD is correct

Toerag

Surely any VAT you charge gets 'forwarded' on to the taxman by yourselves? So you won't be losing out, as you are just not taking money that you'd have to pay out later.

Oh, and for anyone reading this Guernsey and Jersey are classed as export locations, so the residents of those places don't pay VAT on items taken out of the UK.

P20SPD

iTrader: (1)

Nixs, take it your referring to the tax code you assign from sage. T5 is not a standard VAT code on sage. The correct one to use is T0, as the items should still go on the VAT return in box 6.

[Edited by P20SPD - 11/26/2002 10:38:52 AM]

Squizz

..."Whatever"

So I still don't charge VAT, Right?

P20SPD

iTrader: (1)

Correct! Although for your own benefit, ring the helpline!

Was being quite serious about the T coding, as if T5 is configured wrong, then it may not put the net sale on the VAT return, this constitutes an incoorect vat return submission, albeit only statistical, but wrong. HMCE dont like "wrong" vat returns

Squizz

My reasoning was that they had a limited budget, and if they were going to have to pay VAT which they couldn't claim back - I'd have to adjust our costs to reduce the charge by 17.5% to fit into their budget...

...I think.

Squizz

My wife is an accountant, and doesn't know.

Hey hang on - her dad's a VAT Inspector/Supervisor.

DOH!

P20SPD

iTrader: (1)

try him then!

but basically what you were saying is that you are not as competitive price wise if you have to charge VAT and they can not recover!

steven

ps i am an accountant, dont want to say YES, as each case is different and i dont know ALL the details, hence why i have suggested the Helpline. The Inspector would be better though, assuming that area is his field

Squizz

Found this, which I think applies:

iv) Supplies to business, non-business or private customers located outside the EC:
The place of taxation is your customer’s country. VAT is not due in any member State although local taxes in the non-EC country may apply.

Examples:

1) A UK business supplies a right to publish its photographs to a USA business. The place of supply is the USA and is outside the scope of UK VAT. The UK supplier should not charge UK VAT.

2) A UK business supplies digitised or on-line tourist information to a private consumer in Australia. The place of supply is Australia and is outside the scope of UK VAT. The UK supplier should not charge UK VAT.

Squizz

Cheers Steven,

He's away on business - but I'll contact him when I can.

Nice car, BTW

P20SPD

iTrader: (1)

Bingo

Cheers

[Edited by P20SPD - 11/26/2002 12:27:18 PM]