How to account for an VAT number starting EU after Brexit

Accounting
1

My company bought an inexpensive online training course generated in the US. The supplier generated an invoice with a VAT number starting EU and charged Tax at ~20%.

Net £15.82
Tax £ 3.17

Total £18.99

I’m not sure what I should do about the VAT when I tag the receipt; I’m on the standard VAT scheme. It’s only a small amount, so if I can’t reclaim the VAT (or it is too complicated), so be it. But if it is simply a matter of ticking the right box, I’d like to know what to do.

Thanks.

2

Hi @Magicbean

You may find that this guide helps you: Choosing the right VAT options for your overseas clients and suppliers

But if you are unsure on how to report the VAT it is always best to speak to an Accountant

3

Thanks @QFBeth,
I don’t know if that helps. I think my query is based on the fact that for a purchase from abroad (now including the EU) the invoice would have no tax and we would select the reverse charge option to self-account for the VAT.

In this case, apparently EU tax has been paid according to the invoice, so reverse charge would appear not to be appropriate.

I guess, I’ll just treat it as £18.99 and set it to reverse charge. Although I won’ t be reclaiming the £3.17 tax, I can’t think of else that makes any sense.

By the way, the last link in the article Choosing the right VAT options for your overseas clients and suppliers (the one to to https://support.quickfile.co.uk/t/vat-updates-january-2021/39039/14) is broken - would this have explained more?

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Hi @Magicbean

That link should take you to: VAT Updates - January 2021

5

This would have been the correct thing for them to do if (a) you were a consumer, not a VAT registered business and (b) it was still before 1st January this year. If you’d provided them with proof that you’re a business rather than a consumer then they should not have charged you VAT at all (and you reverse charge the purchase), if they’re treating you as a consumer then by now they should have a GB VAT number since overseas suppliers can no longer use the EU MOSS system for UK consumers, they need a proper UK VAT registration instead.

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6

Thank you @QFBeth - that link works.

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@ian_roberts That makes sense.

I’m happy to forego the tax as it’s so small but in terms of QuickFile, should I tag the receipt as £18.99 and set the VAT to 0? Or reverse charge it?

My brain is alternating between the two.

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Unless you’re partially-exempt it doesn’t make any difference to your overall VAT liability either way so I can’t imagine HMRC would care for that small an amount. Probably safer to RC it than not I guess.

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