"Currently, if a UK VAT-registered business sells anything overseas but within the EU, it must charge VAT at the UK rate of 20 per cent under the 'place of supply' rules. "
This is simply not true. In fact, the exact opposite is true. A UK VAT-registered business must NOT charge VAT when selling to customers within the EU.
Which leads me to believe that the author doesn't know what he's talking about.
A UK VAT-registered business must NOT charge VAT when selling to customers within the EU.
You've applied the rule too generally.
The rules are:
1. Customer is an EU and VAT-registered business: no VAT *if* proof of business provided in the form of a VAT number.
2. Customer is an EU business: no VAT number: charge VAT at your local VAT rate.
3. Customer is an EU consumer: charge VAT at *your* local rate.
4. Customer is based outside the EU: no VAT.
The new rules affect the above thus:
1. No change.
2. Charge VAT at *customer's* local rate.
3. Charge VAT at *customer's* local rate.
4. No change.
The new rules also place a significant burden on proving the customer's location: you must verify their address using at least two methods, one of which may be the address the customer provides; and the other may be their credit card address, or geoip lookup via their IP address.
Whichever proofs you rely on must be recorded with the purchase, and kept for 10 years.
Has UK been enjoying special treatment here? Generally in EU you charge consumers their home state VAT, unless your sales there falls below some treshold ("insignificant" sales to that location).
1. Customer is an EU and VAT-registered business: no VAT if proof of business provided in the form of a VAT number.
I wish it worked that way in practice BTW. When asking about it at Apple Store in London (I have a business registered in Poland), the clerks replied that unfortunately they don't know what I'm talking about and thus they'll have to charge VAT.
Comments
"Currently, if a UK VAT-registered business sells anything overseas but within the EU, it must charge VAT at the UK rate of 20 per cent under the 'place of supply' rules. "
This is simply not true. In fact, the exact opposite is true. A UK VAT-registered business must NOT charge VAT when selling to customers within the EU.
Which leads me to believe that the author doesn't know what he's talking about.
A UK VAT-registered business must NOT charge VAT when selling to customers within the EU.
You've applied the rule too generally.
The rules are:
The new rules affect the above thus: The new rules also place a significant burden on proving the customer's location: you must verify their address using at least two methods, one of which may be the address the customer provides; and the other may be their credit card address, or geoip lookup via their IP address.Whichever proofs you rely on must be recorded with the purchase, and kept for 10 years.
Has UK been enjoying special treatment here? Generally in EU you charge consumers their home state VAT, unless your sales there falls below some treshold ("insignificant" sales to that location).
https://en.wikipedia.org/wiki/European_Union_value_added_tax...
Generally in EU you charge consumers their home state VAT
No. That's what's changing in 2015.
I wish it worked that way in practice BTW. When asking about it at Apple Store in London (I have a business registered in Poland), the clerks replied that unfortunately they don't know what I'm talking about and thus they'll have to charge VAT.
I wish it worked that way in practice BTW
I wish it did as well! (I'm also based in Poland and make the odd purchase in London).
FWIW you can still claim back the VAT, so at least it's "just" a cashflow issue.
Yes, this is correct. Thank you for the clarification.
What you said is only true for B2B services. Normally, you would have to charge UK VAT for B2C services supplied to EU consumers: https://www.gov.uk/government/publications/vat-notice-741a-p...
Ok, agreed. Got confused.