VAT Numbers

[tom 7000]

I have a client who wants a vat number and has sent me the text below....

You can get a EUROPEAN VAT number for your company in Pakistan .

You can then sell goods on local UK market or in any of the EU countries and charge VAT + pay the VAT to the tax office.

You will get a nbr starting with EU, which is valid for all EU countries. You should apply in UK for this.

....is this correct because its news to me or maybe Im just unedyucated??

Tom

[spidersong]

I have never heard of this (and I spent 3 years in an HMRC Registration Unit, mostly as a technical manager!). It could be something that's come in in the last couple of years but it seems rather unlikley.

Non-established taxable persons would get a GB VAT registration number, as would distance sellers, people registering for acquisitions etc., and the VAT Act contains nothing allowing registration beyond these. So unless there's some obscure piece of legislation giving vires for this that CCH etc don't include in their books then this isn't part of UK law.

How would a number be valid for all EU countries anyway, it wouldn't result in you being registered in all EU countries as you would only be paying the UK authorities, and I've never heard of them establishing a EU wide tax administration body (I think the Daily Mail, Private Eye, The Guardian etc. would've noticed by now if they had!)

As I say though I may be wrong and this could be some new whizzy system that no one in the UK has noticed yet.

[3pic]

Hiya Spidersong, rare to see you stumped to be honest, but I've got the answer to this dilema.

You don't see these type of queries too often!

The "EU" VAT number relates to VAT on E-Services (aka, VOES) which is a simplified(!) method for Non-EU businesses selling e-services to non-VAT registered businesses or individuals within the EU. It is a special scheme, introduced in July 2003 and only for NON-EU trades, trading in e-services in the EU.

Ordinarily, a non-EU business making sales to individuals in member states would be liable to register for VAT in each member state depending upon the various VAT registration thresholds in each member state. There was a special concession (VOES) for the provision of e-services only.

Rather than having to register for VAT in every member state, the scheme allows a foreign business to have one VAT number (designated EU:xxxxxxxx) and then account for the output VAT on those sales electronically via an online portal in the country where they've "registered".

I'll post you some links for further reading as the rules are straight forward so you should be able to understand them.

HMRC link that explains it a bit more :-
http://customs.hmrc.gov.uk/channelsP...yType=document

and another one in much more detail :-
http://customs.hmrc.gov.uk/channelsP...HMCE_CL_001460

Bottom line, there is nothing dodgy about the use of such an EU number, and indeed, suggests the business is being a good boy and complying with the EU legislation.

[3pic]

Oops, for some reason my cut and paste from the website didn't work first time around so give these a try instead.

http://customs.hmrc.gov.uk/channelsPort ... e=document

http://customs.hmrc.gov.uk/channelsPort ... _CL_001460

Tom, I hope that answers the question.
3pic.

[spidersong]

Thanks for that 3pic, that's given me some further information on an area I don't often deal with, to be honest I hadn't looked deeply into the E-services side (I was aware of the e-services registrations but must admit I thought the numbers were based on the country code of the registering country).

Unfortunately I'd taken the post at face value, as the post said "sell goods" I'd only really considered the question from this point of view rather than looking down the services viewpoint as well.

So that being said if the company is looking at physical goods sales through an EU VAT reg then they'll need to register as a Non-Estab or set up an office here anyway!

But point taken if they are an electronic services co then they're well advised to look at those HMRC web links.

Cheers

[3pic]

Glad to have helped and yes, I was stumped by the 'sell goods on local UK market' - my first thought was some foreigner selling fruit and veg at Spittalfields/Borough wholesale market!.

Tom7000 - I'm assuming your client is selling some sort of software download, electronic data transfer, e-books, web server or other web services or just dealing with the confusion of Google AdWords charging Irish VAT - as this is where the question usually comes from.