VAT from UK to Ireland

Storm99

Hi all, I am sure this has been asked to death but I cannot find it !

I want to buy motorcycle parts and accessories from a distributor in Northern Ireland. I am recently VAT registered and I think the dealer list prices are inclusive of UK VAT.

Do I pay the UK VAT and then claim it back from somewhere and then deduct it from my selling price ?

also, when calculating my selling price do I calculate VAT on the cost of my item & shipping & margin Then add irish VAT ?


Thanks !

Legend100

Purchase:
you provide your vat number to the supplier in the north and then they will not charge you UK vat

You then self account for the irish vat in your vat 3 return.
Eg
you buy parts for 1000 in the north with no vat (having given the supplier your vat number)

You add 21.5%, €215, of the thousand to your vat on sales (T1 on vat 3)
You claim simultaneous input credit for the purchase €215 (T2 on Vat 3)
The effect is a nil liability for the purchase of the parts.
You also need to put the 1000 down on the vat 3 in the E1 box. This is for statistical purposes.

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Sale:
When you sell the part, as you said- cost plus margin will give you a net sales price and add vat at 21.5% onto this figure.

so from above eg
cost 1000
plus margin (whatever you are charging say 30%)
Net 1300
Vat 279.50 (21.5% of 1300)
sales price 1579.50

hope that helps

Storm99

Cheers mate !!! Makes sense now.

Just one question, if my UK supplier insists on charging me VAT, is there seperate procedure and is the UK VAT refundable ?

Thanks again !

Legend100

there is a method of reclaiming the vat from the HMRC in England when it has been mistakenly charged. cant think of the name of the form off hand but I'm sure someone had it on here before and might be able to help you on it.

there should be no reason why the northern supplier would still charge you vat if you've given your vat number as they should be aware of the intra-community provisions as they are in place throughout europe.

this is assuming they are vat registered in the north

Storm99

OK, Thanks again mate ! I really appreciate your help.

Legend100

had a quick look for you. the form is called a vat65 and is available at

http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_CL_000067

use this if the uk supplier charges you vat