Jay Cooke

Start with this link and then read the follow on pages. https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc06584 Suggest you also read this Notice as certain trading in carbon credits are a known fraud risk and may need to be dealt with under the reverse charge regime. Section 3 specifically but read the whole document. https://www.gov.uk/guidance/the-vat-domestic-reverse-charge-procedure-notice-735

Jeff Au According to your explanation, the UK entity never buys any goods (the UK customer acquires the goods in China and the UK customer is responsible for importing into the UK and responsible for all UK taxes), so if the customer is buying direct from China factory and importing to the UK, what is it that you are invoicing for? You never own the goods or take possession of them, so how can you sell goods that you never owned? The UK company isn't importing anything into the UK so it has no UK import tax to reclaim (the UK customer is responsible for that), so is your UK company invoicing for goods (it never owns) or for something else, like a commission for arranging the transaction between UK customer and China factory? A simple thing to remember with VAT is "Who is selling what to whom", If the China factory is selling goods (who) to UK customer (whom), then where does your UK company fit into this?

What does offshore mean? Do you mean your client (the business) is not UK established (ie, based in the EU/rest of the world) or do you mean they are offshore, as in working on an oil rig or similar? Generally, place of supply of services is driven by the location of the (business) customer, not where the person doing the work lives/is doing the work. So if your client is a UK based entity (company, sole trader, etc) and his customer is a UK based business, then UK VAT would apply to all sales, regardless of where the individual physically performs the work. There are exceptions to this rule, such as services involving land related supplies (such as geology surveys, architect, etc) and so suggest you read up on the Notice 741A https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec6

Your question is confusing....you state you are VAT registered with HMRC, but then your question a) asks where you need to register for VAT. So are you UK VAT registered or not UK VAT registered? The UK does not operate the EU wide simplification of MOSS but the logic remains the same, you are non-UK business selling digital services to UK customers. Place of supply of B2C digital services is where the customer is (UK), therefore you are required to register for UK VAT, there is a Nil VAT threshold for non-established (non-UK based) traders. This is the same rule in the EU, a UK business selling to EU consumers would be required to register for VAT in each EU member state where they sell to EU consumer or the UK entity can register for the simplification MOSS/OSS (One Stop Shop). https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers You register for UK VAT via the HMRC website https://www.gov.uk/register-for-vat where you first need to create a "government gateway", a "portal" for your VAT account, almost all EU member states operate an online VAT portal, UK no different. Once signed up for the portal, you can then register for VAT, or if you are already UK VAT registered, the portal is where you can review your VAT returns, payments, etc. You cannot pay your VAT liability with a personal credit card, that has never been permitted. You can pay with a debit card. https://www.gov.uk/pay-vat/by-debit-or-credit-card-online You can also make payment from an overseas bank account but the HMRC payment details are different to the details used if you are paying from a UK bank. https://www.gov.uk/pay-vat/bank-details If your credit card is not allowing payment, first check the payment is going to the bank details related to HMRC's overseas payment account and not the UK account and also make sure you are paying in sterling/GBP, HMRC do not accept payment in Euro/foreign foreign currencies. None of these issues are Brexit related, most EU member states do not allow payment via credit card, do not allow payment in foreign currencies, etc. Also, all EU member states tax offices have a single portal designed primarily for domestic taxpayers and foreign entities have to apply for VAT/other taxes the same as any other domestic business, a UK business would therefore have to navigate the German tax office website in German for example.

Is there a compelling reason why the client has decided to change to flat rate scheme? Flat rate is something you have to request, it is not automatic as FRS is not the default VAT accounting method. Client will ned to identify their flat rate percentage. Ensure your client understands how FRS works (input tax restrictions and limited cost trader rules). Visit this link https://www.gov.uk/hmrc-internal-manuals/vat-flat-rate-scheme/frs3200 and within that article there is another link that explains the criteria for seeking a retrospective witch to FRS https://www.gov.uk/hmrc-internal-manuals/vat-flat-rate-scheme/frs3300 and note in that guidance the stance HMRC take when trying to retrospectively change to FRS. If the 1st return has not yet been submitted then it may be possible to request a switch to flat rate scheme, but it is not guaranteed that HMRC will accept it, depends on the circumstances and reasons why.

The companies may be in a corporate group but VAT purposes, you have to treat as if they are individual companies and nothing to do with each other. So driver theory tests, MOT fees and similar costs incurred in Company A and recharged to Company B are recharged plus VAT. Both the driver test and MOT will not have any input tax charged on them as these supplies are from statutory bodies and their fees are not subject to VAT, but only when they supply to you the customer, when you recharge those costs onto someone else, whether an employee or an associated company, you add VAT. Same with train or airline tickets, zero rated when you buy them from the train or airline company, but if you are recharging these onto someone else, you add VAT.

Depends on the Incoterm and what was agreed when organising the shipping. If you shipped DDP (Delivered Duty Paid), then regardless of the customers VAT status, you are liable for any import duty and VAT (which you can't get back). If you shipped DAP (Delivered at Place) then your are liable for getting the goods to the customer, but the customer is liable for paying any import VAT/duty. If you don't tell the freight agent, they usually default to DDP, because they have a relationship with you/the sender and it's easier for them to recharge you any foreign costs incurred. Whereas if you ship DAP, it means the freight agent has to invoice the customer and there is a risk they will not get paid, or else the freight agent has to withhold delivery until the customer pays, either scenario is a hassle for the freight agent.

Who owns the goods at the time the goods are shipped from Germany? If you take ownership of the goods in Germany, firstly you'll need a German VAT registration as you are making a supply of goods in Germany. If the German supplier is shipping your goods, they should be using the value they sold it to you as the value on the paperwork, also the German supplier would charge you German VAT as they (the supplier) are not exporting their goods, they are exporting goods they have first sold to you and are the shipping your goods to your end customer. If you do not take ownership of the goods in Germany and the German supplier owns the goods and is "making the sale" directly to the customer and you are just an agent/middleman, they they would use the value they sold it to you for (the lower amount) and you will need to ask the supplier to instruct the freight agent to substitute their supplier invoice with your own invoice....how you get your invoice inserted into the shipment as the official commercial invoice you'll need to liaise with the German supplier and whoever their freight agent is. However, if you are asking the freight agent to swap the German commercial invoice with your own, that that brings us back to who owns the goods and it would suggest you own the goods (otherwise if it was just a sales agent commission then you'd just issue your commission invoice and not concern yourself with commercial shipping invoices as you aren't selling anything, just your services of commission). Who owns the goods at the time they arrive at the port in UAE? If the shipment has your commercial invoice it, that suggests you are the exporter of the goods, and as the goods were in Germany when they left , that suggests you must own the goods in Germany. Check back with your German supplier to see whether they intend to zero rate their sale as a direct export under their own name/carriage or whether they will charge German VAT to you and then they ship your goods as a convenience for you. Their response will then clarify as to whether they think they are selling the goods or you are.

1. Your turnover is the amount you receive from your customer, so you are correct in including the postage cost as well as your invoiced amount (turnover). 2. You calculate VAT on the amount you receive from the customer, so you should add the price of the goods plus the postage together and then you add VAT to that (you charge VAT on the postage as well as the goods). 3. The VAT rate you use is based on the VAT rate of the goods you are posting. For example, if you are posting a mobile phone cover or a part for a car, these are standard rated goods, so you treat the postage and the goods themselves as standard rated. If you are posting a book or childrens clothing, these goods are zero rated and so you zero rate the goods and the postage. https://www.gov.uk/guidance/vat-on-postage-delivery-and-direct-marketing-notice-70024#delivered-goods

HMRC routinely pass VAT collection/VAT debts onto third party debt collection agencies. Best way to fix this is to fix the issue itself. Do you have outstanding VAT returns, have you filed VAT returns but not paid all of them in full and on time? Have you ceased to trade but forgot to tell HMRC VAT team? Access your VAT gateway to see what the state of play is in terms of what HMRC think you owe and then deal directly with HMRC until the matter is resolved. Once resolved, HMRC will withdraw the 3rd party debt collector. You do not have to discuss anything with the 3rd party debt collector, they have no access to HMRC records nor in a position to discuss or negotiate your situation, so if you don't think you owe anything, if you think HMRC are wrong then deal with HMRC. If on the other hand you do owe the money and there is no dispute, then pay the debt collector. With VAT, any change of address must be made to the VAT team, if you just wrote to HMRC re. corporate tax or personal tax then they will not automatically update your address for VAT, your address for VAT purposes can often be different to your registered office (ie, the VAT address should be your trading address), this is why HMRC do not automatically update the VAT address as a business can change its registered office but not change it's trading address, or vice versa, etc.