vat reg in uk?

Sound Computers

just glancing through a few other posts, someone mentioned vat registration here would be UK inclusive? ie could claim vat back on england purchases for stock etc. T or F? cheers.

kenbrady

Sound Computers wrote: »

just glancing through a few other posts, someone mentioned vat registration here would be UK inclusive? ie could claim vat back on england purchases for stock etc. T or F? cheers.

It is not UK vat inclusive. They are different countries, you cannot claim back vat paid in the UK from the Irish revenue. You can cliam it back from the UK revenue if you are vat registered in Ireland but it is a lot of hassle.

But if you are registered for VAT in Ireland. You can give your Irish VAT number to the uK company and they will provide you with the stuff with out adding on the VAT.

Even though you don't pay any vat you still need to account for it in your Irish VAT returns. This is very simple, just charge yourself the vat and claim it back. It is an paper filling process and no money is involved.

Sound Computers

I think I understand, Ken. Let me give an example to be sure.

I'll simplify to make sure I get it. I purchase a piece of stock. In UK price is equiv to E61.99 vatin and 50.99 exvat. I buy 1 unit at 50.99 and mark it up 25% 50.99*1.25 = E64. now I add irish vat. 64*1.21 = 77.44.

assuming my shipping cost to receive is offset by my "reshipping" to customer for simplicity.

real world
COGS - 50.99
Irish VAT MAN - 13.44
Profit to me - 13.01

on the books
COGS - 64
Irish VAT man 13.44
Profit to me - 0
Claim back UK VAT - 13.01

result is the same, but in "real world" example there is an actual decrease in up-front costs to me.

again, thanks Ken

RUDOLF289

Sound Computers wrote: »

I think I understand, Ken. Let me give an example to be sure.

I'll simplify to make sure I get it. I purchase a piece of stock. In UK price is equiv to E61.99 vatin and 50.99 exvat. I buy 1 unit at 50.99 and mark it up 25% 50.99*1.25 = E64. now I add irish vat. 64*1.21 = 77.44.

assuming my shipping cost to receive is offset by my "reshipping" to customer for simplicity.

real world
COGS - 50.99
Irish VAT MAN - 13.44
Profit to me - 13.01

on the books
COGS - 64
Irish VAT man 13.44
Profit to me - 0
Claim back UK VAT - 13.01

result is the same, but in "real world" example there is an actual decrease in up-front costs to me.

again, thanks Ken

Hello Sound Computers

This is on the assumption that you are registered for VAT in Ireland and that your UK supplier issues you with a Zero rated invoice, i.e. you pay your UK supplier net of VAT.

On receipt of the UK invoice you account for the VAT due on your suppliers invoice (21%) in your VAT return as a liability in the box marked T1. However, since VAT on purchases for your business is a deductible input, you claim back the same amount in box T2. Essentially your outlay on your UK purchase is zero, the transaction is VAT neutral.

You invoice your client 21% VAT on your selling price. That 21% is remitted to Revenue. You add that to the total you enter in box T1.

So taking the values in your posting, this is how it looks ;

Purchase
Cogs @ 50.99
21% liability = 10.71
21% deductible = 10.71
Net cost is 50.99

Sales
Cogs @ 64.00
21% on sales = 13.44
Remittance to the Revenue is Euro 13.44

Whilst the outcome is the same, in that you end up with 13.01 profit and the Revenue get "their" 13.44 in VAT, it is important to do the calculation correctly. Also, if your t/o is less than Euro 1 million p/annum, you can apply to settle VAT on sales on the basis of "moneys received". Over 1M you actually have to remit VAT on the basis of sales invoice issued.

Hope this makes sense

Best regards,
Rudolf289

Sound Computers

Ken and Rudolf

thank you both for your input. I follow it now.

With whom will I apply for "Monies received" status, or is that just in my accounting?

RUDOLF289

Sound Computers wrote: »

Ken and Rudolf

thank you both for your input. I follow it now.

With whom will I apply for "Monies received" status, or is that just in my accounting?

Hello SoundComputer,

you will have to apply to the Revenue in order to be able to remit VAT on the basis of "Monies Received". I am sure if you are using an accountant they would be able to assist you with same. Please see attached VAT guide 2008 (still the most recent VAT guide available from Revenue) and refer to chapter 12.

Best regards,
Rudolf289

Sound Computers

having a closer look at my TR1, I already had this monies received status chosen from the beginning. cheers.