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Complex VAT question

  • 15-01-2010 2:14pm
    #1
    The Guvnor
    Registered Users, Registered Users 2 Posts: 2,800 ✭✭✭


    Hi All,

    I have a query on vat thresholds relating to distance selling.
    All transactions would be from a business to a non vat registered customer.

    If you are based in Ireland and sell a selection of goods into the UK via a website, I believe the limit is £70,000/€100,000. After this you must register with the UK for VAT.

    The issue is - what if only a small percentage of the goods attract VAT? Is the limit based on total sales or just on sales of products which would attract VAT within the UK. [I believe the answer here is, it is based on total sales

    There is another issue where these goods would be zero rated (0%) in Ireland but vatable in the UK. I suppose this makes no difference as the vat is liable based on the final destination of the goods.

    On the flipside if you were UK based selling into Ireland then the limit is €37,500 for distance selling.

    The same questions really apply - what if the product has VAT on it within the UK but has zero in Ireland can you then sell it ex-vat to the customer?
    B]I assume this would be correct but I have yet to see a UK company do this.[/B

    Based on the above thresholds there must be a lot of CO's not complying due to not being aware of the legislation. If a UK company exceeds €37,500 in sales into the ROI who will verify this figure and vice versa?


    There is VIES and Intrastat. I spoke with a guy in VIES and he said not to worry vat payable in Ireland on goods I export which kind of contradicts this revenue page: http://www.revenue.ie/en/tax/vat/leaflets/distance-sales-eu.html



    This is one of those areas that ends up confusing the hell out of you. You start off thinking you understand it and after discussing it for a few minutes you end up second guessing yourself and getting increasingly confused!


    Thanks for any help and apologies if it confuses anybody.:)


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