Quick VAT question

[JCKST1]

We importing quite a few products from Spain recently and were charged about 4500EUR in VAT, this is shown on the invoice.

We did query it but the sellers were adamant they needed to charge it and to be honest the offer was excellent so we took it and figured we would claim it afterwards if we can.

Does anyone know is a UK business can try and reclaim this and how we would do it?

I have googled it but it keeps sending me to the Spanish tax site, the Gov site isn't much help either.


cheers

[Eric Mc]

The only way you could reclaim Spanish VAT would be to register for VAT in Spain.

[Regy53]

I’d you are vat registered also eori then technically sit shouldn’t have been charged at source .

[Eric Mc]

That's the best option. Try and get the Spanish supplier to Zero Rate the sale in the first place.

[Simpo Two]

Regy53 said:

I’d you are vat registered also eori then technically sit shouldn’t have been charged at source .

Perhaps the OP could convince the seller to refund that portion... would save having to tussle with Spanish tax authorities...

[bnseven]

Regy53 said:

I’d you are vat registered also eori then technically sit shouldn’t have been charged at source .

These are the old rules before brexit, for the Spanish vendor this is an export sale and the goods are leaving the EU so should be zero rated. The purchasers VAT status/Eori number is irrelevant here, they could be anywhere in the world. I would ensure the vendor has proof of shipment, ideally customs entry going out of EU and ask them to Zero rate

[Regy53]

To refund the vat past event might be a issue, depend how the export has been registered .

We have to get exs , t1 ( if passing country’s ) etc if none of this was done as vat paid then it might be to late

We export about 20 million quid of plant a year . It’s a pain since brexit

[Regy53]

bnseven said:

Regy53 said:

I’d you are vat registered also eori then technically sit shouldn’t have been charged at source .

These are the old rules before brexit, for the Spanish vendor this is an export sale and the goods are leaving the EU so should be zero rated. The purchasers VAT status/Eori number is irrelevant here, they could be anywhere in the world. I would ensure the vendor has proof of shipment, ideally customs entry going out of EU and ask them to Zero rate

That’s not the old rules pre brexit that’s the rules post brexit for zero vat. It runs different to rest of world trade

[JCKST1]

Thanks everyone.

I did query it and then they sent me a zero rate invoice with the price the same lol.

It was a large stock clearance from a distributor and there was other interested parties so we quickly pulled the trigger and paid it, its not the end of the world as the price was super low but a bit annoying.

We might be buying some more from another warehouse in the EU soon so I will make sure that is zero rated from the start.

I might see if there is anything I can do but understand it will be a pain.

[N8CYL]

Hi... No it's not a pain. They don't charge vat and therefore don't pay any VAT. You can postpone the payment of UK VAT choosing to postpone on your import instructions.

[Simpo Two]

JCKST1 said:

I did query it and then they sent me a zero rate invoice with the price the same... we quickly pulled the trigger and paid it

I think you probably threw away your chances right there. They issued an invoice without VAT and you paid it. Outwitted by a Spaniard!


NB You earlier said:

JCKST1 said:

were charged about 4500EUR in VAT, this is shown on the invoice.

[JCKST1]

Simpo Two said:

JCKST1 said:

I did query it and then they sent me a zero rate invoice with the price the same... we quickly pulled the trigger and paid it

I think you probably threw away your chances right there. They issued an invoice without VAT and you paid it. Outwitted by a Spaniard!


NB You earlier said:

JCKST1 said:

were charged about 4500EUR in VAT, this is shown on the invoice.

The final figure was exactly the same, they simply removed the VAT amount, put 0% and the total was the same.
Either way we will still make a large profit on this order, its about half of our current trade price. We should have checked but it was a matter of take it or leave it as the next company will have it if we took too long, the products needed to be sold quickly.

[JCKST1]

Also to add the products have not left the EU yet, we still have the invoice with zero rate on.

The transport company has asked for the usual info (inventory, values etc) and a invoice which can be zero rated, would this allow us to not pay VAT on arrival? The VAT is actually slightly higher than the UK amount.

[Eric Mc]

Are you VAT registered in the UK?

If you are, any UK VAT charged at the point of entry should be reclaimable by you.

[Deesee]

JCKST1 said:

Also to add the products have not left the EU yet, we still have the invoice with zero rate on.

The transport company has asked for the usual info (inventory, values etc) and a invoice which can be zero rated, would this allow us to not pay VAT on arrival? The VAT is actually slightly higher than the UK amount.

On top of the 'VAT' there will be further vat on import charges and post packing, also you may have to pay customs duty depending on the 'goods/items'.

[JCKST1]

Eric Mc said:

Are you VAT registered in the UK?

If you are, any UK VAT charged at the point of entry should be reclaimable by you.

Yes we are, I have emailed them now the deal is secured to query the vat. Hopefully zero rate it and remove it from the purchase price if thats correct?

[N8CYL]

It cannot be zero rated... Ask for the VAT to be postponed. Then you can deal with it in your quarterly VAT returns. The Spanish have just pocketed the vat as profit.

[JCKST1]

N8CYL said:

It cannot be zero rated... Ask for the VAT to be postponed. Then you can deal with it in your quarterly VAT returns. The Spanish have just pocketed the vat as profit.

The company is actually UK ran, not a small set up too (approx 200 employees I think).
They had branches in Spain which were shut down recently and stock moved to a distribution centre, this is the stock we are purchasing so although the company in UK based the invoice is in their Spanish company name and in EUR with IVA tax (Spanish VAT).

They did reply to me and said the price quoted all along was gross with VAT and thats basically what I have to pay. They have issued me another invoice with a full breakdown of each product, this has the VAT at 0% (export) but the same total. The original invoice has the price with IVA and at the end the total with the VAT/IVA amount shown.

So from my understanding now, I will pay the 20% VAT in the UK as expected and can possibly claim this back. I will have a chat with my accountant about this but wanted to get a better understanding myself on here without bothering him if it was an easy fix.

[MrJuice]

Eric Mc said:

That's the best option. Try and get the Spanish supplier to Zero Rate the sale in the first place.

I had someone do that for me. I was one of many customers for him

He paid VAT in Spain to his suppliers but did not charge it for exports to the UK ie it was zero rated. This was pre Brexit

He tried to reclaim the input vat from the Spanish exchequer and they refused. It was north of 200k for him. Just had to write it off

Bonkers

[MustangGT]

JCKST1 said:

Simpo Two said:

JCKST1 said:

I did query it and then they sent me a zero rate invoice with the price the same... we quickly pulled the trigger and paid it

I think you probably threw away your chances right there. They issued an invoice without VAT and you paid it. Outwitted by a Spaniard!


NB You earlier said:

JCKST1 said:

were charged about 4500EUR in VAT, this is shown on the invoice.

The final figure was exactly the same, they simply removed the VAT amount, put 0% and the total was the same.
Either way we will still make a large profit on this order, its about half of our current trade price. We should have checked but it was a matter of take it or leave it as the next company will have it if we took too long, the products needed to be sold quickly.

That does not sound right. If the amount charged to you is the same as before in total, then they are upping the pre-VAT price to make more profit.