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Where Taxpayers and Advisers Meet

when to charge

Joined:Wed Aug 06, 2008 3:40 pm

Postby dunerider » Sun Jul 16, 2006 3:08 am

There are several different questions here, I could do with a head start on.

I have 2 businesses, one sells services, the other is an online shop, I trade as a sole trader encompassing the 2.

For the services, I charge VAT to all UK businesses. I've recently taken on a client in Jersey and a client in the USA, how should I treat these, is it simply a case of not adding VAT to invoices?

For the online shop, at present I only sell to the UK, but if I chose to sell to EU would that need any changes to my set up?

How should I treat a sale to the Channel Islands , I had an email from a potential customer in CI asking for a VAT free price - I dealt with it by ignoring it. My online prices include VAT.

I 've recently bought stock in from Ireland but they didn't charge me VAT, why not?

I also buy in from the US I understand that they wouldn't charge VAT, but isn't Ireland in the EU?

Sometimes the shipment from the US has customs taxes addedwhich I then pay at the postofffice on collection, how do I account for that.

I'm sorry to ask so many Qs, i just need a prod to take me off in the right direction, I have real problems understanding the official websites without having a "human" conversation first.

Thanks to anyone who helps

Joined:Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Sun Jul 16, 2006 8:41 am

That's a lot of questions..

I'll start off with a few answers..

For services supplied, it depends on the nature of the service, where the supply is made and where the recipient is based. It is likely that your Jersey client and your USA client will be exempt supplies. i.e. no VAT to add to the invoices.

If you sold goods to other VAT registered businesses in the EC then you can zero-rate the sales i.e. no VAT. If they are not registered for VAT themselves then you charge VAT as normal. If they are outside the UK and outside the EC then they are exempt. i.e. no VAT.

You did not get charged VAT on your purchase from Ireland for the above reason.

MMI Accountancy

Joined:Wed Aug 06, 2008 3:40 pm

Postby dunerider » Sun Jul 16, 2006 9:47 am

Thanks for replying, I know there are loads of Qs, I've been storing them up, whilst burying my head in the sand. However I realise I have to face up to these issues sooner or later, and when better than a hot sunny Sunday afternoon?

I'm still confused. Are there 3 sets of rules then? one for UK suppliers, one for EU suppliers and one for rest of world.

I'm ok with UK, they charge me VAT. I claim the VAT back.

Is it the case with Ireland because its EU, they don't charge me VAT, therefore I don't claim it back? Reciprochal taxation within EU.

Therefore when I buy from the US since it is outside EU therefore VAT is not applicable, But I do have to pay customs.

Thus if when pay customs/import tax on collecting these goods (say I paid £100 to the supplier and I paid £20 tax on collection) Do I say the goods cost me £120 in my acct package? Or do I account for the items separately?

Joined:Wed Aug 06, 2008 3:02 pm

Postby paultaylor@vatease.c » Thu Jul 20, 2006 8:12 am


You second question does not seem to follow on from the first as you have moved from sales to purchases. As the rules differ it really forms a separate question.

This answer assumes you are VAT registered and dealing in standard rated goods and services.


If you purchase goods from a UK based, VAT registered supplier you will by charged UK VAT.

If you purchase goods from a supplier in another EU Member State you will not be charged VAT. You must provide them with your VAT registration number. You should also account for acquisition VAT on your UK VAT return (it goes into box 2 on the return). You can claim this VAT back on the same return subject to the normal rules.

If you purchase goods from outside the EU you will have to pay VAT (and possibly duty) when the goods enter the UK. HMRC should issue you with a VAT paid certificate by post. This acts as your purchase invoice to allow you to recover the import VAT.

If you buy services from providers outside of the UK and they do not charge you VAT, you should account for output VAT under the reverse charge mechanism. This gets added into box 1 on the return and can be reclaimed subject to the normal rules.


If you are selling goods to persons within the UK you must account for UK VAT.

If you are selling goods to persons in another EU member state you will need to know whether they are VAT registered and using the goods for a business purpose.

- If they provide you with a VAT registration number you can invoice without VAT. You will need to have evidence that the goods left the UK.

- If they are not VAT registered you must charge them UK VAT.

If you are selling goods to someone outside of the EU, you do not charge VAT (regardless of whether they are in business or not). You will need to have evidence that the goods have left the UK.

The taxation of services will depend upon the nature of the services. For example, if you are undertaking work on goods located in the UK then UK VAT is chargeable but if you are supplying advertising services to a customer outside of the UK then UK VAT is not chargeable.


Paul Taylor

Joined:Wed Aug 06, 2008 3:41 pm

Postby md2 » Fri Aug 11, 2006 5:41 am

Hi Paul,

I have a question re: VAT -

How do I complete the VAT return if my UK registered company buys goods from a country outside the EU and resells them to another country, again outside the EU, without the goods ever entering the UK?

Many thanks,


Joined:Wed Aug 06, 2008 3:02 pm

Postby paultaylor@vatease.c » Tue Aug 15, 2006 1:59 am

The purchase and sales values of the goods should be included in Boxes 6 and 7 but you need not account for VAT on the transaction.


Paul Taylor

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