Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Ordering an item through a company

Options
  • 08-11-2004 4:41pm
    #1
    Amaru
    Closed Accounts Posts: 680 ✭✭✭


    Apologies if this is in the wrong forum, but i didn't know where else to put it.

    Does anybody know how this works or how to do it? I want to order an mp3 player from england through my dad's company as a business expense in order to get the tax off of it. Is there any restrictions on what you can order? If the company you're ordering the product from doesn't give the option to enter your tax number, is it possible to get the tax back before the end of the fiscal year? Anything else i should know?


Comments

  • Options
    #2
    conical
    Registered Users Posts: 378 ✭✭conical


    Can't give much help, but a mate bought his ipod this way; while he couldn't justify an MP3 player for his business, a "portable hard drive" was completely legit!

    -C


  • Options
    #3
    JackKelly
    Registered Users Posts: 3,225 ✭✭✭JackKelly


    well, i ordered a pc this way but a pc seems more office related than a mp3 player.as far as i know, the product is claimed and tax taken back at the end of the year.not sure about this though


  • Options
    #4
    Amaru
    Closed Accounts Posts: 680 ✭✭✭Amaru


    It can happen that way, but a mate of mine ordered an iRiver through a british website and the tax was never added to the price. Apparently its because his dad had ordered stuff before through the company and they still had his VAT number stored with the account(my friend didn't mean to order it as a business expense). Unfortunately thats all he could tell me so i need more details.


  • Options
    #5
    Corkey123
    Registered Users Posts: 757 ✭✭✭Corkey123


    If you are registered for VAT in Ieland, you can quote your VAT number when purchasing from company in the EU. They can then sell you the goods VAT free. However in their VAT returns they record this sale as VAT free. These returns are forwarded to the appropriate revenue authority to ensure that you declare the goods in your VAT returns and pay the VAT. You cannot legally get away with VAT.

    If you are not registered for VAT (the majority of us) then you have no choice and you must be charged the VAT.


  • Options
    #6
    Wolff
    Registered Users Posts: 1,186 ✭✭✭Wolff


    If you have a vat number the uk company cannot charge you vat and vice versa

    You dont have to pay the vat if the item is for resale

    The revenue would have to prove the item was not for resale in order to reclaim the vat and would they be bothered ?


  • Advertisement
  • Options
    #7
    cgarvey
    Registered Users Posts: 3,886 ✭✭✭cgarvey


    MartinCorcoran wrote:
    These returns are forwarded to the appropriate revenue authority to ensure that you declare the goods in your VAT returns and pay the VAT.

    You do have to show the 0 VAT intra EU trading on your VAT3 returns, but you don't pay VAT (assuming it is a business expense, or for resale).

    .cg


  • Options
    #8
    cgarvey
    Registered Users Posts: 3,886 ✭✭✭cgarvey


    Wolff wrote:
    If you have a vat number the uk company cannot charge you vat and vice versa
    Thats how it's supposed to work .. however in reality there are a large number of UK companies that have no clue of this, and no system in place to implement this. I always check first, and the usual course of action is fax the VAT number on headed paper (some ask for Revenue letter).. and they refund the VAT after the order(s).

    Wolff wrote:
    You dont have to pay the vat if the item is for resale
    Correct, or if it is a business expense.
    Wolff wrote:
    The revenue would have to prove the item was not for resale in order to reclaim the vat and would they be bothered ?
    A common conception. You could get away with paying 1/2 or 1/4 of the VAT/Tax you pay, but you run the risk of inspection, and if you get inspected (particuarly a VAT inspection), any reasonably large purchase will come under the spotlight .. and its then you should be thinking of!! So in your "would they be bothered" factor in the risk of inspection.

    .cg


  • Options
    #9
    Amaru
    Closed Accounts Posts: 680 ✭✭✭Amaru


    You seem to know your stuff cgarvey. So if its a business expense i definitely don't have to pay tax?

    And how large are we talking about when you say "reasonably large purchases"? the VAT would be about 80 euro.


  • Options
    #10
    ruprect
    Closed Accounts Posts: 630 ✭✭✭ruprect


    Amaru wrote:
    And how large are we talking about when you say "reasonably large purchases"?
    If your father is a plumber and buys 20 plasma screen tvs "for the business" it may raise some eyebrows.


  • Options
    #11
    davmigil
    Registered Users Posts: 590 ✭✭✭davmigil


    You would have to arrange the VAT arrangement with the EU supplier beforehand. Even though the EU has a mechanism in place, not all companies will oblige.

    The alternative is to use a supplier registered for VAT in Ireland and your company reclaims the VAT in the normal manner.

    As stated already this would only apply to (apart from goods for resale) items used in the course of your business. Ie if the MP3 player had a microphone was used as a dictaphone for company matters..yes..used to listen to music at home...no!

    http://www.trade.uktradeinvest.gov.uk/ireland/doingbusiness/08_customs/customs.shtml

    " VAT between EU Member Countries is based on the "Destination Principle".

    The UK exporter will need to obtain the VAT registration number of their customer

    and quote it on their sales invoices along with their own VAT registration number.

    The UK exporter will zero rate the goods and the importer in Ireland will declare

    the goods on their VAT return form. "


  • Advertisement
  • Options
    #12
    cgarvey
    Registered Users Posts: 3,886 ✭✭✭cgarvey


    Amaru wrote:
    So if its a business expense i definitely don't have to pay tax?
    Correct.
    Amaru wrote:
    And how large are we talking about when you say "reasonably large purchases"? the VAT would be about 80 euro.
    That's a piece-of-string argument. Its relative to the rest of the business (e.g. turnover, typical bi-monthly VAT return figures, etc.)

    What it all boils down to, really, is how you can justify it, should you ever get a VAT inspection, or a Tax inspection. Unfortunately, a lot of that, in turn, boils down to the mood of the inspectors on the day of the inspection!! You need to be able to justify the expense to the inspector (otherwise they may charge you the VAT, and even fine you .. but more importantly keep an eye on you in the future!).

    Can you justify it? E.g. I am an IT consultant on the road a lot, so I bring industry news clips, my contacts and apointments with me on my iPod, as well as config files I need when I am on site. I'd argue that's justifiable.

    Similarly, I'd argue that ruprect's example is not justifiable.


    HTH (I am not an accountant, solicitor, or tax advisor)

    .cg


  • Options
    #13
    ElNino
    Registered Users Posts: 1,503 ✭✭✭ElNino


    cgarvey wrote:
    Correct.

    HTH (I am not an accountant, solicitor, or tax advisor)

    .cg

    I am a company accountant who has been on the receiving end of a number of VAT inspections and I would say that your potential saving is not worth the risk. If you know someone going shopping to the US over the next few weeks, ask them to buy you an Ipod in an Apple store and it will work out much cheaper.


Advertisement