VAT Exempt when buying from Amazon

yuloni

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srsly78

What is the problem? You should only be buying stuff for work with that amazon account. Buying personal stuff through it would be illegal, but buying work stuff is fine - even with a personal card + reimbursement.

yuloni

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srsly78

They will lookup the vat number and check if the registered address matches the billing address, simple.

I get work stuff delivered to my home all the time, but the billing address is still the companies address.

yuloni

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exaisle

It's not an issue.

The seller doesn't really care who pays for the goods as long as they're paid for....and the person who pays for the goods is not necessarily the owner. The owner is to whom the goods were sold according to the invoice.

yuloni

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smeharg

exaisle wrote: »

It's not an issue.

....

It absolutely is an issue!!

From what OP outlines it would be possible for him and other employees to use this Amazon account to make personal purchases without having VAT charged. That could be construed as fraudulent use of a VAT number which attracts severe penalties.

Amazon must take reasonable steps to ensure that the correct VAT treatment applies. If they are found not to have taken reasonable steps then they could be liable also.

OP's company could also get in to bother for knowingly allowing its VAT exemption number to be used by employees for personal purchases.

Here's a recent ECJ case on a similar matter https://www.charteredaccountants.ie/General/News-and-Events/News1/2012/September/ECJ-Rules-on-Burden-of-Proof-necessary-for-VAT-Exemption-on-Intra-Community-Despatches/

srsly78

The whole system relies on self-assessment you know? Anyone can commit VAT fraud, but there is a paper trail left behind.

In your case above all those personal purchases will show as bought using the companies vat number, this will come out during audit.

smeharg

srsly78 wrote: »

The whole system relies on self-assessment you know? Anyone can commit VAT fraud, but there is a paper trail left behind.

In your case above all those personal purchases will show as bought using the companies vat number, this will come out during audit.

I Don't know who or what post that is directed at, but both the supplier and purchaser (with the VAT exemption) should have processes in place to PREVENT the fraud from happening. Detection at Revenue audit doesn't solve the problem, nor can you assume it would be detected at audit.

If both parties take reasonable steps to ensure the VAT exemption is bonafide then they won't be held liable even if a third party has acted fraudulently. If they haven't taken reasonable steps then they could be held liable.

Allowing employees uncontrolled access to the company's Amazon account through which they can make personal purchases free from VAT is, in my opinion, asking for trouble.

srsly78

Well employees can also dip their hands into the till, this is the same thing - stealing (from the taxpayer in this case). Only trusted employees should have purchasing authority.

And again: the billing address must match the official one. Invoices get sent to this address. Does nobody notice all these personal purchases? If this stuff gets disallowed then it will have to be paid back.

yuloni

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mathepac

An easy way to control the possibility of illegal purchases is to match invoices / delivery dockets with purchase orders generated internally. Ask your supplier to quote these references on thgir documentation. I'd be surprised if Your auditors don't request this to prevent the unauthorised purchases you mention.

yuloni

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srsly78

Amazon run a check when you enter the vat number. Probably this one: http://ec.europa.eu/taxation_customs/vies/

mathepac

Getting any online seller to quote a PO number is simple. For example:

The fixed Bill To Details :

The XYZ Corporation
123 Main Street
Carlow
Ireland

The Ship To Details (one line of which you'll need to change each time):

The XYZ Corporation (ATTN: Condi PO-01234)
123 Main Street
Carlow
Ireland.

Once you and your suppliers stick with a PO number appearing on all relevant documentation at least you can show you are in control and any other VAT-free transactions have nothing to do with either organisation.

BTW, if I wished I could use a VAT Reg. No. off an Invoice from any company I deal with I could.

yuloni

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mathepac

Condi wrote: »

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Coincidentally the brother used to work for them many moons ago - a good company.

exaisle

smeharg wrote: »

It absolutely is an issue!!

From what OP outlines it would be possible for him and other employees to use this Amazon account to make personal purchases without having VAT charged. That could be construed as fraudulent use of a VAT number which attracts severe penalties.

Amazon must take reasonable steps to ensure that the correct VAT treatment applies. If they are found not to have taken reasonable steps then they could be liable also.

OP's company could also get in to bother for knowingly allowing its VAT exemption number to be used by employees for personal purchases.

Here's a recent ECJ case on a similar matter https://www.charteredaccountants.ie/General/News-and-Events/News1/2012/September/ECJ-Rules-on-Burden-of-Proof-necessary-for-VAT-Exemption-on-Intra-Community-Despatches/

It's not an issue if somebody in the company uses the company's VAT number to purchase goods for the business, but with their own credit card. My point was that if it's a legitimate purchase, it's irrelevant whose credit card was used.

If somebody in the company uses the company's VAT number to purchase personal goods ex-VAT without the company's knowledge, then that is fraudulent.

However, if somebody in the company purchases personal goods ex-VAT, with the company's knowledge, then this is not necessarily a fraud. The company would be obliged to self-account for the VAT (ie. pay it to the Revenue) as if they (the company) had sold the goods themselves.

yuloni

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