Jay Cooke

A pro forma invoice is not a VAT invoice, it does not create a tax point for the supplier until the payment is made by the customer, when customer pays, the supplier is required to issue a formal VAT invoice. If the supplier is not issuing formal invoices after payment, then you may have to request an invoice. Certain retail environments like hotels are often focused on the individual consumer rather than the business customer, so the hotel procedures are probably not geared towards issuing full VAT invoices (as the general public don't care about VAT as they can't reclaim it), but if you request an invoice, the hotel is obliged to issue a proper invoice. HMRC guidance here https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9010 https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9010

Place of supply is usually where the customer is - you are correct - but you also need to consider "use and enjoyment rules" see link here, section 13 https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec13 "The use and enjoyment rules are intended to make sure taxation takes place where services are consumed where either services are consumed within the UK but would otherwise escape VAT, or they would be subject to UK VAT when consumed outside the UK. Effective use and enjoyment takes place where a recipient actually consumes services irrespective of the contractual arrangements, payment or beneficial interest." Read the guidance and see if that applies to the purchases you have made. If the VAT has been correctly charged, you should be able to reclaim this VAT directly from HMRC by submitting a claim into HMRC, link and guidance here https://www.gov.uk/guidance/vat-refunds-for-non-eu-businesses-visiting-the-uk If the VAT has been incorrectly charged then you can refer the agency/supplier to the guidance in HMRC Notice 741a (as per first link) and ask them to reissue the invoices without VAT (outside the scope of UK VAT).

https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec2 at section 2.4 it states :- B2C supplies means supplies to a: private individual charity, government department or other body which has NO business activities ‘person’ (natural or legal) who receives a supply of services wholly for a private purpose B2B supplies means supplies made to businesses. It also includes supplies to customers that have both business and non-business activities such as charities, local authorities and government departments. Unless you have information that suggests the service is wholly for private use, you may presume that your customer is in business if they provide you with their VAT number. So this is quite nuanced, if the charity is in business (making sales) but they are below the VAT threshold, they are still seen as a business (B2B), but if the charity is 100% fully funded by donations only and does not make any kind of sales, then it is likely be seen as not in business and treated as B2C for VAT purposes. The European legislation mirrors the UK legislation, see this link here https://taxation-customs.ec.europa.eu/where-tax_en which focuses on whether the customer is in business or not, you could be a business but if buying goods for a personal use would be seen as a B2C sale, the status of the business (VAT registered) indicates a business purpose but that may not be the case. The EU guidance states "The place of taxation is determined by where the services are supplied. This depends not only on the nature of the service supplied but also on the status of the customer receiving the service. A distinction must be made between a taxable person acting as such (a business acting in its business capacity) and a non-taxable person (a private individual who is the final consumer). The concept of a taxable person covers anyone who independently carries out an economic activity, even if that person is not identified for VAT purposes, but it also includes a non-taxable legal person identified for VAT purposes [Article 43 of the VAT Directive]." Yes, having a VAT number removes any doubt as to the status of the charity/customer, but VAT thresholds exist across the EU and an Irish charity might simply be below the VAT threshold in Ireland, still a taxable business just not VAT registered. So I think the answer is it depends on the status of the customer, once that is established, then the answer should reveal itself.

The builder charged VAT and has paid that over to HMRC (hopefully). The builder now just needs to issue a credit note for the VAT only element, HMRC will refund the builder, builder can refund your Mum. The builder might argue that they will refund your Mum once they've had the refund from HMRC, if they say this, ask them when their next VAT quarter period will be, VAT registered traders submit VAT returns each quarter, if their VAT quarter is say Sept-Oct-Nov, and they raise credit note in November, they will file the VAT return for that period by the 7th January and would get the refund a week or so later. If the builder is very helpful they will issue the credit note and refund the money to your Mum now in time for Christmas and then they will submit their VAT return and await their refund from HMRC in January.

There is nothing in the law on this, most suppliers have brains and can figure this out but you can't legislate for stupidity. If the supplier has asked their accountant then the reply about disbursements is irrelevant, accountant hasn't understood the question asked or supplier has not explained the question properly, this was never a question of disbursements (it is not a disbursement). This is just a simple situation whereby supplier buys goods for £100 + £20 VAT, supplier reclaims the £20 VAT, supplier then recharges the goods on for £100 + £20 VAT, no mark-up or profit earned on this transaction but VAT fully charged, supplier is complying with the VAT rules, customer acquires the goods without mar-up from supplier, everyone wins. The supplier is of course allowed to add a mark-up for their troubles and it might be that the supplier is doing exactly that, adding a 20% mark-up, if so, maybe buy the goods directly and not via the supplier. Only solution, if common sense is not prevailing, is to not use them again and explain to them they are marking up all their prices that makes them too expensive to deal with.

You need to file a VAT return, if you are saying you've made no sales, then file a Nil VAT return. You file that through bridging software or digital accounting software. You will not be allowed to deregister whilst you have an outstanding VAT return. The £2,000 is not a laughable made up figure, it is based on what you put on your VAT registration when the question asked you what level of turnover you expect to have in the next 12 months. If you said £50k of sales, output tax would be £10k and HMRC use a formula to estimate input tax that you might reclaim each quarter and arrived at the £2k figure, it is an estimate based on your own turnover estimate and the sector you are in (retail, IT, consultancy, etc). Once the return is filed, the estimated £2k will be adjusted to reflect the correct liability, in your case you are stating the liability is Nil, the £2k disappears, you are up to date with your filed VAT returns, no liability and no penalties or interest, then you can deregister, you can deregister via the government gateway/portal that you have for VAT. HMRC can have delays in processing VAT registrations, especially overseas traders in Asia and as HMRC use the postal system to communicate, there can be further delays as post can take 10-14 days to arrive at the overseas destination. Registering for VAT (or indeed any tax in a foreign jurisdiction) always comes with a risk of not knowing the procedures, not knowing the domestic legislation or rules and the risk of having to deal with problems like delays that have caused this issue which then need to be fixed. When you received your VAT registration letter in the post, you should have promptly setup your government gateway and added the VAT service and you would have seen when your first VAT return was due and potentially avoided the late filing issue. There was clearly some delay in you receiving the letter from HMRC and this could have meant your first VAT return was due very quickly after the VAT number was issued, but equally, HMRC are not responsible for postal delays or if the post was lost/undelivered. Stuff like this does happen, letters get lost or delayed in the post, HMRC will still issue estimated penalties as HMRC will not know you didn't receive the letter on time, etc. It is just part of dealing with a foreign tax office (HMRC) as a foreign trader. I have clients that have similar frustrations dealing with the French or German tax offices, it is just the way it is. There is no specific guidance that gives you a simple answer, instead you have to read various different parts of VAT guidance that deals with registration, penalties and deregistration, etc.

HMRC may be reluctant to reply as the issue appears to be in Spain (rejecting the import) and therefore outside the scope of HMRC's remit. I wonder if the word "vinyl" is causing the problem? Try adding document code Y999 as certain vinyl materials have dual military use, not suggesting Pink Floyds Dark Side of the Moon is military grade vinyl (but a classic album nonetheless) but there are some goods containing vinyl. It may also be to do with that HS code also includes electronic recording equipment (tape recorder, solid state storage devices such as hard drives) and the "Integrated Industrial Register" relates to waste goods being imported into Spain, specifically electronic goods (which would include tape recorders, hard drives, etc).  Maybe your freight agent isn't doing the import entry correctly and the Spanish border control are rejecting the import because it doesn't have the right paperwork (were it genuinely electronic equipment/waste), it doesn't need paperwork per se, it's an LP/album on vinyl, but it is under a HS code which includes electronic goods. Other than that, not got any other ideas as to why the goods are being returned.

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VAT will be applicable but there should be no customs duty. The courier/postman may require payment of this VAT before delivery and there may also be a admin charge from the courier/postman for dealing with the import for you.

Is the email you are using this one? ISBC.eoricontact@hmrc.gov.uk If so, they are usually good at replying in a reasonable timeframe (1-2 weeks). Presumably you have an EORI not tied to your VAT number, but that you do have a VAT number, so have you tried just applying for an EORI number here https://www.gov.uk/eori and the screens will ask if you are VAT registered and will then process the EORI matching your VAT number. Use the new/matching EORI for all your imports going forwards, also worth while registering for CDS/Postponed import VAT accounting.....you still need to cancel your "old" EORI but if you've emailed HMRC then you've done all you need to do /can do.

It is unsporting when recharging a cost, to charge the gross plus VAT. As CraigF has stated, if the supplier is able to reclaim the VAT on the costs/general expenses they buy in, when recharging onto the customer the supplier should simply recharge the net amounts of those expenses plus VAT, that way the customer is paying the same amount as if the customer had paid for these expenses themselves. However, there is nothing in the legislation that compels a supplier to recharge net plus VAT (although it is good practice), the supplier can add a mark-up if they want to, depends on the contract T&Cs, but in my experience, a phone call to the supplier to explain that by charging VAT on top of the gross, means the supplier benefits/makes an unintentional mark-up/profit and that you as the customer lose out, usually the supplier will reissue the invoice as there is no loss to them, especially if you have an ongoing relationship with them.