VAT question: NI and Ireland

redspider

Hi,

I have a question relating to VAT. For a VAT registered business which is registered in Ireland (Dublin to avoid any confusion!), lets call it company A, it is receving and paying for a service which it gets from company B. This company B is registered at the CRO in Dublin, and delivers the services to company A in Ireland and invoices for those services in Euro on a monthly basis. Both companies have address in Ireland (republic!). Sounds normal.

However, the invoices to date have not been "100%" in terms of information, particularly VAT information. Only a Total amount was given on the invoice which was inclusive of VAT, and the VAT number was 'unusual'. A VAT rate of 21% was indicated verbally and by email.

The company B when queried, and queried (!), eventually came back and said that the company was registered in the UK for VAT (in Northern Ireland), had a UK VAT number, that the VAT rate applicable and included in the invoice was 17.5% (not 21%!), etc. Basically, all the amounts presumed on the invoices to date have been incorrect, as well as the company information, etc.

Does anyone know what company B should be doing in terms of how they charge for VAT? Is it treated like EU VAT, shouldn't they not charge any VAT on their invoices and leave it as zero?
Also, they should use a UK address for their company, UK company information and full UK VAT information, I would have thought.

As an aside, VAT reclaimed back from Revenue (by Company A) has been over-stated and is incorrect. Its not a huge amount as the value of the services delivered is small, so no problem posting it here.

Thanks,

redspider

ps: there has to be a better tax collection system than VAT, it is sooooo inefficient and is a barrer to business.

kluivert

What is the regsitered address of the company.

Is it in Northern Ireland or Ireland. Are you sure it is regsitered in Ireland with the CRO. Are all their returns up to date.

A companies Vat Number should be on the invoice, otherwise you shouldnt came the input on your returns.

A calculation of Vat should be on the Invoice.

IF you where in the shoes of the revenue auditor what would say.

boomer_ie

Also you cannot claim back UK paid VAT from the Revenue Commissioners, simply give the UK company your VAT Reg number and they do not charge VAT on your purchases. You will still have to notify revenue of your imports etc.

RandomOne

boomer_ie wrote:

Also you cannot claim back UK paid VAT from the Revenue Commissioners, simply give the UK company your VAT Reg number and they do not charge VAT on your purchases. You will still have to notify revenue of your imports etc.

^^^^^^^^^^^^^^^^ Yep. (I'm way better at UK VAT than Irish.)

OP: You can tell your supplier to give you a credit note for all your VAT - ignore them arguing. They can write (produce) an invoice for zero goods and all the VAT charged so far. This will be netted off their next VAT liability and give you back the VAT you can't reclaim. You include this VAT credit on your next return to make things right this end.

If you no longer use this supplier or not often enough for the credit to be practical, push for a refund. It's most unlikely you'll get into trouble for this since it was wrongly charged to you in the first instance. The issue is getting it squared up now it's been discovered.

(But your supplier is deep in the **** with UK Excise if he doesn't sort it out)

redspider

Thanks for the replies.

Just to answer some of your points:

> What is the regsitered address of the company.
> Is it in Northern Ireland or Ireland. Are you sure it is regsitered in Ireland with the CRO. Are all their returns up to date.

They have registered companies and addresses in both jurisdictions. The invoices were not clear, no address was on it!

> A companies Vat Number should be on the invoice, otherwise you shouldnt came the input on your returns.

There was a VAT number but it was not clear that it was a UK one, as it looked like it could be an Irish one. ie: It did not have IE or GB/UK in it to make it clear.

> A calculation of Vat should be on the Invoice.

There wasn't any calc's of VAT. Not a prope invoice, yes I know, tell me about it!


> IF you where in the shoes of the revenue auditor what would say.

Yes, I know, get correct invoices from the supplier and claim/pay appropriately. Funnily enough, these invoices were audited by Revenue though and they said nothing! Maybe just staying clear of it as the values are low and not enough to be worrying anyone. Administrivia rather than VAT carousel!


> Also you cannot claim back UK paid VAT from the Revenue Commissioners, simply give the UK company your VAT Reg number and they do not charge VAT on your purchases. You will still have to notify revenue of your imports etc.

Agreed. The VAT number of the receiving Irish company was given to them, yet they still applied VAT to the prices (as it was known what the net price should be approx, but as it was a consumption based service, no-one spotted the difference between 17.5% applied rather than a 21% rate). People were working on the basis that the supplier were Irish VAT registered as it was an Irish registered company that the service agreement was with.

I suppose legally there is no agreement, as it is a different company that is supplying the service than the one that the agreement was with! Hmm. It is a group company though.

> OP: You can tell your supplier to give you a credit note for all your VAT - ignore them arguing. They can write (produce) an invoice for zero goods and all the VAT charged so far. This will be netted off their next VAT liability and give you back the VAT you can't reclaim. You include this VAT credit on your next return to make things right this end.

Yeah, it needs to be sorted out going back over all the invoices since 2003.

> The issue is getting it squared up now it's been discovered.

agreed.

Thanks,

redspider