VAT Exporting Basics. Ian Stinson & Ian Mullen. 2 Presentation title - edit in the Master slide

Transcription

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2 VAT Exporting Basics Ian Stinson & Ian Mullen 2 Presentation title - edit in the Master slide

3 VAT & International Trade 13 November 2014

4 Disclaimer This seminar is of a general nature and is not a substitute for professional advice. No responsibility can be accepted for the consequences of any action taken or refrained from as a result of what is said.

5 The VAT Team - Bristol Ian Stinson VAT Partner Smith & Williamson LLP Ian.stinson@smith.williamson.co.uk Ian Mullen VAT Assistant Manager Smith & Williamson LLP Ian.mullen@smith.williamson.co.uk

6 Contents UK to EU sales of goods B2B and B2C Compliance and reporting Export (non-eu) sales of goods Compliance and reporting Reliefs Supplying services overseas Place of supply where VAT is paid

7 UK to EU sales of goods Business to business (B2B) or Business to consumer (B2C)

8 EU member states Austria (AT) Belgium (BE) Bulgaria (BG) Cyprus (CY) Croatia (HR) Czech Republic (CZ) Denmark (DK) Estonia (EE) Finland (FI) France (FR) Germany (DE) Greece (EL) Hungary (HU) Ireland (IR) Italy (IT) Latvia (LV) Lithuania (LT) Luxembourg (LU) Malta (MT) Netherlands (NL) Poland (PL) Portugal (PT) Romania (RO) Slovakia (SK) Slovenia (SI) Spain (ES) Sweden (SE) UK (GB)

9 EU sales of goods Business to business (B2B)

10 EU sales - business to business (B2B) Goods/invoice UK sale/dispatch to EU VAT registered customer Zero-rated

11 EU sales (B2B) zero-rate conditions Remove goods to another EU country Evidence of removal/delivery (3-months) Customer VAT registered in another EU country Customer VAT number quoted on sales invoice Verification: Invoice statement: Reverse charge supply Subject to reverse charge in country of receipt

12 EU sales (B2B) zero-rate conditions EU removal cannot be zero-rated if: Delivery to or collection by UK customer at UK address; or UK use by any customer between supply and removal

13 Evidence of EU dispatch Commercial evidence includes: Orders, advice notes, packing lists Carrier transport documents Receipted consignment notes Details of insurance or freight charges

14 Evidence of EU dispatch Dispatch documents must show: Supplier name Consignor name (if different). Customer name Goods description Accurate value EU destination Mode of transport and route of movement of the goods.

15 Evidence of EU dispatch Goods collected by EU customer: Written customer order - name, address, EU VAT number, delivery address Copy sales invoice Departure date Name and address of haulier Collection vehicle registration number, driver name and signature Route (e.g. Channel Tunnel, port of exit).

16 Evidence of EU dispatch Goods collected by EU customer: Copy of travel tickets. Name of ferry or shipping company, sailing date or airway number and airport. Trailer or full container number. Name and address for consolidation, groupage, or processing. High risk - take VAT deposit pending evidence?

17 Evidence of EU dispatch Postal dispatches Receipted postal forms HMRC VAT Notice 725 para 5.9 Couriers and fast parcel services Notice 725 para 5.10

18 EU sales (B2B) - UK VAT return Box 1 Output VAT 2 Output VAT on EU acquisitions 3 Total output VAT 4 Input VAT 5 Net VAT payable/reclaimable 6 Net outputs 7 Net Inputs 8 Net EU sales (dispatches) 9 Net EU purchases (acquisitions)

19 EU sales list (ESL) Report of EU VAT registered customers Mandatory for EU sales of goods (B2B) Monthly/quarterly (sales +/- 35k pa) Penalties - late submission/material inaccuracies Simplified/annual ESL s for smaller businesses

20 EU sales (B2B) - Intrastat reporting Monthly report of EU goods movements EU sales over 250k per year Report of movements Commodity codes Weight Delivery terms Non-submission/inaccuracy penalties.

21 Transfers of own goods Goods Branch or warehouse Consignment stocks Call-off stocks

22 EU supply and install contracts Sale of goods with contractual obligation to install VAT supply in country of installation Supplier EU VAT registration, or Reverse charge simplification

23 Other EU movements of goods Samples Disregarded Goods for testing Disregarded if ownership unchanged and goods returned or destroyed Temporary movements Not treated as supplies. No acquisition VAT due on retur

24 EU sales of goods Business to consumer (B2C)

25 EU Business to Consumer sales (B2C) Goods/invoices EU private individuals or unregistered businesses UK VAT charged Normal VAT return declarations Subject to distance selling rules

26 EU Business to Consumer sales (B2C) Distance selling Threshold 35k or 100k Local VAT registration Local VAT charged/declared Local VAT reporting UK/EU Intrastat reporting

27 Export sales

28 Exports Goods Invoice VAT Zero-rate Export goods within 3 months Evidence of export

29 Export evidence direct exports Direct exports supplier arranges shipment Official HMRC produced/endorsed documents Commercial sea/air waybills, shipping certificates Supplementary evidence of transaction Must identify: Supplier/consignor Customer Goods with accurate value Export destination Mode of transport and route

30 Export evidence indirect exports Indirect exports customer collects and exports Evidential standards HIGH Transport documents, plus Written order with customer details Copy invoices with goods description Delivery address and date of departure Details of haulier - driver name/signature Route and copies of travel tickets Details of shipping company/airport Trailer/container numbers VAT deposit pending evidence?

31 Export evidence HMRC VAT Notice 703, Exports Air and sea freight 7.1 Road freight 7.2 Merchandise in baggage 7.3 Groupage/consolidation 7.4 Postal exports 7.5 Courier and fast parcel 7.6 Rail 7.7 Exports through packers 7.8 From Customs, Excise, Fiscal warehouses 7.10

32 Exports - UK VAT return declaration Box 1 Output VAT 2 Output VAT on EU acquisitions 3 Total output VAT 4 Input VAT 5 Net VAT payable/reclaimable 6 Net outputs 7 Net Inputs 8 Net EU sales (dispatches) 9 Net EU purchases (acquisitions)

33 Exporting services

34 Intangible services Customers outside the EU

35 Intangible services Transfer/assignment of copyright, patents, licences, trademarks etc. Advertising services Services of consultants, engineers, consultancy bureaux, lawyers, accountants, and similar services, data processing and provision of information, other than any services relating to land Banking, financial and insurance services Provision of access to, or transmission or distribution through, natural gas and electricity distribution systems and provision of other directly linked services.

36 Intangible services Supplies of staff Hire of goods (other then means of transport)* Telecommunications services* Radio and television broadcasting services* Electronically supplied services* *subject to use and enjoyment provisions

37 Intangible services Supplied to customers outside the EU? Yes - VAT zero-rated

38 International services - special rules Land-related services Where the land/property is located VAT payable by supplier or customer? Hire of means of transport Where used or put at the disposal of customer Local VAT registration required Restaurant and catering services Where supplied Local VAT registration

39 International services - special rules Admissions to events Where event takes place Passenger transport services Where transport takes place Intermediary services (B2C) Where underlying supply takes place Transport services (B2C) Where performed

40 International services - special rules Where-performed services (B2C only) Cultural, artistic, scientific, sporting, educational, entertainment and similar activities Work on goods

41 Do you provide your services to business customers (B2B), or non-business customers (B2C)?

42 What is a business customer? A person registered for VAT, or Any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity

43 B2B general rule Zero-rated UK sale VAT due where customer belongs to receive the service EU customer responsible for declaring VAT Reverse charge

44 B2B general rule Sales invoices Quote customer EU VAT number (if applicable) This supply is subject to the reverse charge No VAT Other evidence of business status Tax/fiscal certificates UK VAT return EU sales list (ESL)

45 B2B general rule EU sales list (ESL) Report by EU customer VAT number ESL quarterly or monthly Not HMRC generated Verification by EU customer tax authorities 21 day e-filing deadline (14 days for paper submissions) Penalties for late submission

46 Do you provide your services to business customers (B2B), or non-business customers (B2C)? B2C

47 What is a non-business customer? An overseas person that cannot evidence: EU VAT registration, or Other business status

48 B2C services - general rule Place of supply is where the supplier belongs UK Supplier = Services subject to UK VAT

49 B2C electronic services Electronically delivered services Music, films, apps, e-books, training courses From 1 January 2015 Taxed where customer downloads service Multiple EU registrations, or Mini one-stop shop

50 Business West VAT training VAT and international trade in goods VAT and international trade in services March 2015

51 These notes have been produced for the guidance of delegates at the conference for which they were prepared and are not a substitute for detailed professional advice. No responsibility can be accepted for the consequences of any action taken or refrained from as a result of these notes or the talk for which they were prepared.

52 Smith & Williamson LLP Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International The word partner is used to refer to members of Smith & Williamson LLP Portwall Place Portwall Lane Bristol BS1 6NA Tel: Fax:

53 VAT & International Trade 13 November 2014