VAT issues with suppliers

superlec · Jun 27, 2012

Hi all, i'm new to all this so please forgive me for any errors but i was so annoyed earlier i needed somewhere to vent my frustration and also to find out whether any other sparks/trades have had a similar problem. I recently bought a lot of led lighting from a company called led hut, i placed my order online- no problem, order turned up about a week later - no problem, installed the lights - no problem. since my first order i have probably ordered about £1200 worth of leds. My problem began yesterday when i got a call from my accountant saying that i couldn't claim the VAT back as led hut operate out of jersey and to make matters worse i have now become liable for nearly £250 VAT on the led lights. When i rang them to find out what the situation was i was told that it was up to me whether or not i wanted to claim the VAT. Has anyone experienced similar issues?

Plonker 3 · Jun 27, 2012

Did you not pass the cost of VAT onto your customer for the products?

superlec · Jun 27, 2012

As i'm vat registered i aways skick vat onto my estimates,

Plonker 3 · Jun 28, 2012

Well then surely you are not out of pocket are you?

RISElectrical · Jun 28, 2012

If you are VAT registered, and you have added VAT to all goods and services on your invoice then you have already charged the customer the VAT for the lights. which in turn they have paid to you so you can pay the £250 VAT on the lights and jobs a good un no? If they want you to pay £250 VAT for your order they you can then get this VAT back

gutterball · Jun 28, 2012

claiming VAT back isn't a good way of describing it. you are not claiming it back you are working as an unpaid tax collector. the VAT you add on to your bill belongs to the government and you are collecting it on there behalf and passing it on to them.

Cbigfoot · Jul 7, 2012

The Jersy VET loophole was closed as of 1st Jan this year. I use a company called 7 day shop for printer inks etc, as they are the cheapest. But i have never been able to claim VAT on them as they dont charge it.

You cannot be out of pocket as you never paid VAT. Unless you assumed the price for them included it in the first place!!!

Diffenrelty i have bought a new phone from ORANGE and they are REFUSING me a VAT invoice which is against UK VAT law.

If anyone who is VAT registered i would not use Orange as they do not understand anything about VAT! and thier accounts dept is not contactable via phone or email!!!

Thats it rant over!

snowhead · Jul 7, 2012

Cbigfoot said:
You cannot be out of pocket as you never paid VAT. Unless you assumed the price for them included it in the first place!!!

He bought goods from outside U.K tax territory with no Vat applied.
The goods become liable for VAT when they enter the Country, he owes for the Vat.

He has also charged and collected Vat on the final invoice so owes that, but he would expact to pay that.
Alarm bells should have rung when the LED supplier didn't provide a VAT invoice, or did and it was zero.

EDIT, The final invoiced VAT would have included VAT on the LED's, which he didn't originally pay. He's not out of pocket he just thinks he is.
The Vat collected on the value of the Led's on the final invoice is the "extra" payment he is having to make.

Cbigfoot · Jul 7, 2012

snowhead said:
He bought goods from outside U.K tax territory with no Vat applied.
The goods become liable for VAT when they enter the Country, he owes for the Vat.

He has also charged and collected Vat on the final invoice so owes that, but he would expact to pay that.
Alarm bells should have rung when the LED supplier didn't provide a VAT invoice, or did and it was zero.

I have purchased many times from Jersey and paid no VAT, i only have to charge VAT if i sell them on. If someone supplies goods with a VAT levied on them then they must supply a VAT invoice even if it is from outside the UK tax territory. An example would be that if you purchased software online they probably work out of Luxembourg (Microsoft, Itunes (Ipad apps!)and Adobe do) and they will supply a VAT invoice if you supply your UK VAT number to show what tax has been paid to who in which country, you can then allow from it in your VAT returns.

If all else fails speak to the HMRC VAT helpline, i find them very useful!