VAT

After many years of supplying your services in the UK through a limited company, you have decided to move abroad. Can you continue being registered for VAT if you have a UK-registered address for your company with Companies House?

Q. I own a boat that is permanently moored in Cyprus. It is mainly used for our private holidays, but we sometimes hire it out to friends, relatives and other parties to help pay for its maintenance costs. The income has always been recorded in an American company but we have decided to transfer it to the ownership of our UK company which is registered for VAT. Do we have a potential VAT problem? The boat is worth £500,000. ...

HMRC’s policy of only allowing import VAT to be claimed by the owner of the goods was upheld in a recent Tribunal case. What potential risks does this create for your business?

Your business has the chance to sell goods to private customers in the EU and you are aware there is a low value tax scheme. What is the threshold for these sales and what must you consider to avoid a problem with the EU tax authorities?

Q. Our premises includes a recording studio with specialised equipment which we hire out to local bands and performers, charging VAT on the fee. We have received an enquiry from a French band and they have refused to pay the VAT because they are based outside the UK. Are they correct? A. Most supplies of services provided by a UK business to an overseas business customer are not subject to VAT because the place of supply is deemed to be the customer’s country. This is known as the general business-to-business rule. If the customer is based in the EU, they will account for output tax on their own return by doing a reverse charge calculation, usually claiming input tax for the same amount. However, you are hiring goods to the band - the recording equipment - and the hire of goods is subject to a “use and enjoyment” override. In other words, it is all about where the band will be using your equipment, which is the UK, so UK VAT at 20% VAT must be charged on your fee. The fact that they are based in France is irrelevant. ...

If you buy goods or services from an EU country that you import for use in your UK business, you must usually deal with the VAT ins and outs through your quarterly returns. But what about VAT paid on purchases made while in an EU country?