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UK advertising VAT exemption


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This is a bit puzzling. We've been advertising in UK press for the past 4 years and, as non residents, have always been exempt from VAT charges.

We're currently trying to advertise with a new magazine and they are refusing to cancel the VAT unless we have an exemption number?

Can anyone shed any light on this please? Is this a change to the law / system?

Thanks

Muzzie 

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I'm not an accountant, but my understanding is that for cross-border purchasing in general you have to be able to quote a VAT (TVA for French registered traders) number to the supplier. If you aren't registered for TVA then you don't qualify. Maybe there are special rules for print advertising or else you've been lucky.

(Sits back & waits for an expert to cut that to pieces.)

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If the company is VAT registered then they have to charge VAT on anything sold within the EU. I rather suspect that the companies you were dealing with before did not know this or the more likely reason is they were not (really) VAT registered. If they were then I would keep quite if I were you.
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I agree with Quillan, I deal withour VAT and we are specifically asked on the return about purchases and sales in other EU countries.

However printed paper is VAT exempt in the UK, perhaps your first supplier thought this applied to supplying advertisments and the second suplier does not? Although I deal with print I do not deal with advertising so you may well be advised to look up the regulation.

http://www.hmrc.gov.uk/businesshelp/

My first thought is that if the company is VAT registered then the VAT is payable. Sorry !

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I cannot agree with you. I work in publishing and I was specifically told by les impôts, later backed up by my accountant, that I should not charge TVA on work done for English clients, even though we were both TVA/VAT registered in our respective countries. Admittedly this was invoicing from France, to England, rather than the other way round. What I had to do was to ensure that my SIRET or TVA number (if you know the former you can work out the latter) appeared on all paperwork, and invoices should carry the wording 'Exonération de TVA art 262 ter I CGI'.

I should point out that the last invoice to which that applied was about 18 months ago, but I doubt if things have changed substantially in the meantime.

 

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You are actually both correct, the type of sale is a service and between eu countries is exempt  (or zero rated), the proof of being a business is what will matter for the provider.  A siret or TVA in france number is proving you are a business and therefore eligable but in the UK no equivilant of a siret number - you can just 'be a business' - and unless you register as company or choose (from income) to register for vat there is no real proof in the eyes of the tax office and therefore companies registered for vat must charge you vat.

You could try reclaiming the vat but this is long winded and in my experience does not happen easily.

Abbo2 (ACMA)

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Actually, Will, it's because you are both registered that VAT isn't chargeable. (Sorry about the bold. Ruddy formatting!)

An article could be considered a good that is delivered to the customer's country, whereas advertising is a service (not mentioned below) and if you buy an advert to be published in the UK then it also is not being delivered to the country you are in. If all this is rubbish I admit to never having made a cross-border supply, although I have bought software from Belgium and not been charged because I was VAT registered.

Look here:

VAT > Information & Guides

The relevant bit says:

Supplies to VAT registered customers in other EC Member States/Exports to destinations outside the EC: what do I have to do?

If your business supplies goods to VAT registered customers in other EC Member States and those goods are removed to another EC country the supply may be zero-rated provided you meet certain conditions. You must:

  • obtain and show on your VAT sales invoice your customer's VAT registration number including a 2-letter country code prefix

  • ensure the goods are sent or transported out of the UK to a destination in another Member State within specified time limits

  • hold satisfactory commercial documentary evidence that the goods have been removed from the UK.

If you do not meet all these conditions you must charge and account for VAT in the UK.

You must also submit details to HM Revenue & Customs and record details separately on your VAT Return. If you have a high level of removals you may need to submit Intrastat Supplementary Declarations

You can find more information about trading with VAT registered businesses in other Member States in Notice 725: The Single Market.

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I think most posters have got the general idea but just to be precise, the default situation for a UK supplier is that they will charge VAT on their (eligible) supplies (goods or services).

However, for intra-EU supplies the UK supplier may zero-rate his invoice if it shows the EU VAT number of the customer. Hence the customer must be VAT (TVA) registered in their home country. It is important that you give this number to the supplier as, without it appearing on the invoice, he should charge VAT or may himself be liable to the charge.

It is not enough to provide a SIRET number as VAT inspectors in the UK can, and do, check the validity of VAT numbers appearing on EU zero-rated invoices. There is even a website allowing suppliers to check if the VAT number provided is valid for any EU country.

Hope this makes sense. BTW I am a UK chartered accountant and have had to 'encourage' clients to phone EU customers to obtain these details before zero-rating invoices.

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However, for intra-EU supplies the UK supplier may zero-rate his invoice if it shows the EU VAT number of the customer. quote

 

zero rated supplies apply to the supply not to the supplied, you must prove that you are a business and in the uk this is more problomatic.

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Blimey.......

This probably explains why they did not accept /recognise our SIRET number.

Will - you mentioned that we can work out the TVA  number from the SIRET, please can you tell me how to do this otherwise I have to wait until Tuesday to ask the accountant. We are TVA registered, I just dont know the number.

Thanks to everyone for their help, I guess the previous publishers we've worked just dint bother to ask...?

Muzzie

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[quote user="Muzzie"]

Will - you mentioned that we can work out the TVA  number from the SIRET, please can you tell me how to do this ...

[/quote]

Sorry, my memory wasn't quite accurate. Looking it up again I see that the TVA number is based on the SIREN, i.e. the first nine digits of the SIRET (less the five-digit code at the end). The TVA number consists of a country identifier - i.e. FR, followed by two digits, followed by the SIREN. The two digits are the bit you will have to confirm with your accountant because I don't think they can be calculated.

So if your SIRET is 1234567890034, your TVA number will be FRxx123456789 (where xx is the two digit code referred to above).

Edit - although in another current topic (http://www.completefrance.com/cs/forums/1158572/ShowPost.aspx) Nick seems to confirm what I originally thought. I am in England and my former TVA paperwork is in France at present, so I can't easily check back for a few days.

 

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  • 2 weeks later...
[quote user="abbo2"]

zero rated supplies apply to the supply not to the supplied, you must prove that you are a business and in the uk this is more problomatic.

[/quote]

True, but that only serves to obfuscate. The "supplied", by being VAT/TVA registered receives the goods without VAT/TVA (ie. not at 0%, which is applied to a few items in the UK and very few in France). He/she/it then pays the TVA/VAT at their local/appropriate rate and accounts for it to their VTA/VAT authorities. etc etc...

But that is getting off the point really.

But, the other point is that proof is not problematic (in the UK). It rests in the VAT certificate issued by HMRC. Every VAT-registered person, body corporate etc has one.

So, the point is... Everything bought from the Uk by a TVA-registered French business is free of (UK) VAT, but it must be accounted for in France and a SIRET number is no proof of TVA regsiration.

You (who?) shouldn't really need to be told this - VAT has been around (in the UK) since 1971 and anyone in business must deal with it day in and day out. IANAA, but I know how it works...

I've really lost the plot now, haven't I?

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  • 2 weeks later...

I have had this exact problem before. We are registered for TVA, as is our supplier.

The explanation I have been given by the auditors of the publisher is that (an here is the good bit). The advert purchased is printed/distributed in the UK for the UK market, it is not exported, therefore it is liable for VAT.

Other advetisers we have used in the UK have not charged us VAT though...

 

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Sounds like the ones that charge you have got it right. This extract from HMRC's Web site was quoted earlier.

If your business supplies goods to VAT registered customers in other EC Member States and those goods are removed to another EC country the supply may be zero-rated provided you meet certain conditions. You must:

  • obtain and show on your VAT sales invoice your customer's VAT registration number including a 2-letter country code prefix

  • ensure the goods are sent or transported out of the UK to a destination in another Member State within specified time limits

  • hold satisfactory commercial documentary evidence that the goods have been removed from the UK.

If you do not meet all these conditions you must charge and account for VAT in the UK.

 

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