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Where Taxpayers and Advisers Meet

VAT invoices to non /vat payers

38936mary
Posts:1
Joined:Thu Dec 03, 2020 5:26 pm
VAT invoices to non /vat payers

Postby 38936mary » Thu Dec 03, 2020 5:33 pm

Hi all, new to VAT here.

We are a small education/training company and have recently registered for VAT, therefore issued VAT invoices. However we have vat-registered customers and non-registered customers. My question is: should we charge full amount including VAT for all or can we issue 0% VAT invoices to those not registered?

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: VAT invoices to non /vat payers

Postby robbob » Thu Dec 03, 2020 7:43 pm

Normally whether you customer is vat registered or not will not affect whether you bill them vat or not.
Ie there is no general rule that allows you not to charge vat just because your customer is not vat registered.

However life isn't that easy (after all we are talking about vat here) - so there are a couple of things you may want to bear in mind.

There is the odd situation where the customer type could alter vat tretament - eg there are some limited circumstances where certain items to charities can be billed with no vat.
So you may want as part of your customer ordering process to ask them to indicate if they may be eligible to any reduce rate of vat or exemption from vat and perhaps ask them to provide some details so you can investigate. Note NEVER believe any entity that tells you you don't need to bill vat (number 1 rule here !! trust me) - if they indicate you don't need to bill them vat investigate fully and only don't bill vat if you are 100% sure that treatment is correct.


https://www.gov.uk/vat-charities/what-qualifies-for-relief

Working out the vat treatment of any work within the education or training sector can be fraught with difficulties - so you always want to be sure that you know what the vat treatment of the exact services you are supplying are - eg standard rated sale or exempt sales being the two most likely options.

I am hoping you have fully read notice 701/30 and understand all the basic concepts involved here in that regard. If you haven't i would start by reading 701/30 - if 701/30 doesnt make comlete sense i would recommend getting someone who does understand 701/30 to advise you as approrpiate if you have the slightest doubt as to what vat to charge (or not)


https://www.gov.uk/guidance/vat-on-education-and-vocational-training-notice-70130

an example of how complex this can be is private tuition where the vat rate charged depends on your business type and potentially who is doing the work !
Private tuition provided by a sole proprietor or partner
If private tuition is provided by a sole proprietor or partner (see section 6), the VAT consequences are that the tuition:
carried out is exempt
that employees or other helpers carry out is standard-rated
Note if you have exampt and standard rated sales you may be affected by partial exmption rules that can restrict vat input claims - unlikely to be a problem if you have very little exempt sales but best to ata minimum check how partial exemption works at its most basic level.

Note if you have very little concept of how vat works you may be best off getting your first few vat returns fully checked by suitably competent third party.


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