I have one client based in Eire. I send him an invoice for €60 (no VAT) and collect the €60 as a subscription via GoCardless. My payout from GoCardless is 60€ - fee and converted to GBP (about £49). I know that the VAT is subject to reverse charge so I must pay the vat value to HMRC (yes?). How do I reconcile this in QF so my VAT return is accurate?
Reverse charge is something that the buyer does. If you’re selling services to an overseas business customer (not a consumer) and the “place of supply” is in the customer’s country then you can zero rate the sale and they account for Irish VAT via their reverse charge.
The same applies to B2B sales of goods, you’re making a zero rated export and it’s up to the customer to deal with the import tax.
If the customer is a consumer rather than a business then it gets much more complicated.
Thank you Ian. Yes, I am supplying a service (access to an online booking system) to an automotive business in Kilkenny, RoI. I’ll continue to invoice monthly at zero rate.
That sounds right, but you should include some wording somewhere on your invoice (maybe in the payment terms section) to make clear to the customer that that the reverse charge applies so there can be no confusion.
OK, will do
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