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Hi, I run a company formation agency in London and I sell my

Customer Question

Hi, I run a company formation agency in London and I sell my services almost exclusively to clients from Germany, Austria and Switzerland. Now I need to find out which part of my turnover is VAT relevant and which is not. Is anyone familiar with this subject?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Supplies to Germany, Austria and Switzerland are zero rated for VAT. Only sales to UK organisations are standard (20%) rated. The Channel Islands and the Isle of Man are not part of the EU, so supplies to those locations are also zero rated.

Does that help?
Customer: replied 3 years ago.

No, my question is a different one. There is a VAT threshold of round about 77,000 GBP. If my turnover goes above this threshold I will need to register for VAT. My accountant says that sales to Switzerland - or more precise the turnover that I make there - wouldn't count. That would mean even if I make 100.000 GBP in Switzerland a year I still don't need to register for VAT as this specific turnover - according to my accountant - doesn't count as such. That's the core question.

Expert:  bigduckontax replied 3 years ago.
Sorry, I am a diabetic and just about to eat dinner. I will respond shortly.
Customer: replied 3 years ago.

Sure. Take your time.

Expert:  bigduckontax replied 3 years ago.
Thank you for your patience. I would be most interested to hear where your accountant has found this exemption of Swiss turnover to registration levels. According to HMRC registration is required if all turnover exceeds or indeed approaches the registration level.

If the majority of your trade constitutes exports it is possible that registration might be advantageous to your cash flow by re-claiming input tax.
Customer: replied 3 years ago.

Well, I don't know. They sent me an email in May 2012 in which they state the following:


Further to our last week’s meeting, I have looked into the VAT again about the threshold.


 


Following sales will be included in threshold calculation;


 



  • · Company formation and other services to UK customers (I guess none in your case)

  • · Company formation and other services to German & Austrian customers (individuals/non business only)


 


We should exclude following from threshold calculations;


 



  • · Company formation and other services to German & Austrian customers (Business customer only)

  • · Company formation and other services to Swiss customers (both individuals and businesses)


 


Interessting is the last paragraph on their website about their VAT services: http://www.taxassist.co.uk/our-services/vat-returns


 


So I assumed that they know what there are talking about. And you are sure there is no such thing as exemption of turnover to registration levels?


Expert:  bigduckontax replied 3 years ago.
The website they quote is a commercial one for the guidance of practitioners. I can find no supporting evidence on any HMRC web site. As far as I am aware there are no turnover exemption levels. I would suggest that you request a fuller and more comprehensive explanation of their position.
Customer: replied 3 years ago.

They didn't present it as a quote. Could you send me the link to the website? They simply used copy & paste for that?


So now you now more about the question that I had yesterday: The liability of accountants. Can they be held to account if it turns out that I should have registered for VAT?

Expert:  bigduckontax replied 3 years ago.
With respect you already have the link, you sent it to me. It is:

http://www.taxassist.co.uk/our-services/vat-returns

I have replied to your second question to which you refer. If you wish to re-open that please do. It would not be appropriate for you to combine 2 separate questions on different subjects.
Customer: replied 3 years ago.

Well, misunderstanding. You wrote: "The website they quote is a commercial one for the guidance of practitioners." A. I quoted it, B. the page not a guidance. It's simply embellishing blabla for prospective customers. However. I'm gonna reopen the question from yesterday.

Expert:  Nicola-mod replied 3 years ago.
Hello,

It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola

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