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Where Taxpayers and Advisers Meet

Another Drop Shipping Query

gavint8
Posts:1
Joined:Wed May 10, 2017 9:32 am
Another Drop Shipping Query

Postby gavint8 » Wed May 10, 2017 10:11 am

Hi !

Thanks in advance for any advice offered, its appreciated.

I have a LTD company based in Ireland and a LTD company based in the UK. Both are seperate from each other, both VAT registered in the UK.

The Company in Ireland takes orders from UK customers, and charges VAT to the Uk customer. (end users)

The Company in the UK, fulfills (drop ships) the orders to the UK customers from within the UK.

How does the UK company handle the VAT ? Does the UK company need to charge VAT to the UK customer ? or does the UK company charge the Irish company the price without any VAT as both are registered.

For example...

Irish Company takes order for £10 + Vat

Passes order to Uk Company to fulfill.

Uk Company charges Irish company £9 ( no vat as both are registered)

or

Irish Company takes order for £10 + Vat

Passes order to Uk Company to fulfill.

Uk Company charges Irish company £9 + Vat


Thanks for any advice offered....

Gavin

absolutevat
Posts:38
Joined:Wed Jul 01, 2015 3:28 pm

Re: Another Drop Shipping Query

Postby absolutevat » Thu May 11, 2017 11:06 am

Hi Gavin

Second scenario correct. As the UK co makes a supply of goods to the IE co (albeit the goods go directly to the IE co end customer) and the goods remain in the UK, the supply will be subject to UK VAT (at the applicable rate).


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