Using VAT number for items bought abroad?

NeptunesMoon

anyone know whats the story if a website based abroad will sell goods and charge the vat rate of whatever country you live in (so 21% for us) but who say if you provide a vat number they wont charge it? Ive a vat number myself but this isn't a business purchase so how does it work?

cheers

jor el

It's not a business purchase, therefore you pay VAT.

Nody

NeptunesMoon wrote: »

Ive a vat number myself but this isn't a business purchase so how does it work?

Same way it would go if you would buy any other non work related with your company and have it for private use only (i.e. tax fraud).

jim o doom

As stated above - you can only claim back VAT on items related specifically to your business. Otherwise you have to pay the VAT, if you were to claim anything non-business related & then you get audited, you will have to pay the VAT then & you will be fined a large amount of money on top of that. For business related stuff, when purchasing abroad you can just give them ur VAT number and they won't charge the VAT, because you could claim it back from their country; that's called the reverse charge rule, but like I said it has to be related to your business.Countries outside the EU don't have VAT, but if you import something, VAT & duties might get added on at the point of entry to the country.

NeptunesMoon

its the part about them charging vat from their own country that confuses me, i mean i wouldnt be claiming it as a business expense, but if they are exporting, i just thought they might be able to charge without the 21%. so why are they charging Irish rate and not their own countries rate? if it was their own countries rate would it make a difference? as i said, i wont be claiming it back if im charged it, no way, but if i can not be charged it for personal items it would be nice, but if i have to thats ok :D

jor el

NeptunesMoon wrote: »

its the part about them charging vat from their own country that confuses me, i mean i wouldnt be claiming it as a business expense, but if they are exporting, i just thought they might be able to charge without the 21%.

All EU countries apply VAT, and if you're buying something from anywhere in the EU, then VAT will be applied, normally at the rate for the country in which the company is based. If a company exports over a certain amount to another EU country, then they are obliged to charge that countries rate of VAT. Hence, when you buy from Amazon.co.uk, you pay the Irish VAT rate, and not the UK rate, similarly when you use Dabs.com or Komplett.ie, both are based outside Ireland, but charge Irish VAT.

NeptunesMoon wrote: »

but if i can not be charged it for personal items it would be nice, but if i have to thats ok :D

You're always charged VAT on purchases, anywhere in the EU. The only exception being for VAT exclusive items (children's clothes) or for business purchases.

NeptunesMoon

cheers for the info.

but how does it work then if it was a business purchase. say i needed a part for my car and got it from germany and gave my vat number but never put it down as an expense in my returns and book keeping as a purchase. do the seller in germany show revenue that that item was bought with that vat number and that there was no vat charged on it? i mean if there was no vat charged on it, then whats the problem as the gov aint losing out on anything, right?

jor el

If you buy a part for your car, it's not for the business, and you should pay VAT on it. If you give the business's VAT number to the seller, then you won't pay VAT on it. However, when you are audited, there will be a record of the part bought, and the VAT exemption, for your business, but they'll quickly realise that it wasn't for the business. Queue hefty fines and serious trouble for both you and the business.

The government will have missed out on the VAT payment that was due.

NeptunesMoon

car was bad example just imagine it was a computer part for £11.75 delivered from uk so I got it for £10 and I didn't put it on the books, nobody is losing out are they?

jor el

Look, you can't use a VAT number for a business to buy personal items, no matter what they are, that's called fraud and tax evasion. Best case is you get fined, worst case is prison.