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Where Taxpayers and Advisers Meet

Question on charging VAT

handymanjon
Posts:1
Joined:Thu Apr 12, 2018 2:49 pm
Question on charging VAT

Postby handymanjon » Thu Apr 12, 2018 2:54 pm

Hi,

My company is soon to start trading as an introducing and paying agent for non-EU businesses looking for customers in the UK. We expect turnover to be above the threshold for VAT registration, however the terms of our contract with the customer (who will be paying us) specify they will be paying import VAT (which will be based on the value of the product plus shipping to the EU, duty, insurance and our margin) direct to customs at the delivery port. Given that VAT will already have been paid on our services, how should we be reflecting this? Or will we need to split out our service charge from the import value so that the customer can be charged VAT firstly on the products they're importing and then secondly on the service (when invoiced by us).

Thanks

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: Question on charging VAT

Postby les35 » Thu Apr 12, 2018 3:11 pm

The VAT rules in relation to Agency arrangements for cross-border transactions are complex. The rule-of-thumb is to regard yourself as principal, not agent, and proceed accordingly.
You will need to speak with your Accountant (or engage a specialist) to review the exact arrangement, and check written contracts, and advise you.


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