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bigduckontax, Accountant
Category: Tax
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We are selling goods from the UK to a UK customer who is expemt

Customer Question

We are selling goods from the UK to a UK customer who is expemt (university who uses the products for research) this time they are asking us to deliver the products to a university in Austria. Can you help me with the VAT treatment of this sale.
thank you
Annabel YOung
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello Annabel, I'm Keith and happy to help you with your question.
Who is going to pay your invoice, the UK Customer or the Austrian University?
If it is the UK Customer than your invoice should have VAT added at the standard rate of 20% as normal. If you are invoicing the Austrian University direct, and have their equivalent of their VAT number, than you may reverse charge the VAT, effectively adding in on and taking it off at the same time. You will have to complete an EU Sales List which HMRC will send you automatically when they see VAT entries in the 'Supplies to EU States' and ditto from on your VAT 100 quarterly submission.
So it all depends you see on the organization being invoiced. The reverse charge system appears a bit crazy, but, in the words of Mr Punch, 'That's the way to do it!' One of the organisations I run had an EU sale in the early 80s and still gets EU Sales Lists sent despite never having done such a sale since!
I do hope I have shown you the way forward with your query.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3360
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Thank you for your reply. We are invoicing the UK company customer who provides an exempt crertificate exempt - so is the supply still exempt even if it is delivered to Austria?
Expert:  bigduckontax replied 2 years ago.

That makes it an exempt supply for VAT purposes. You can only reclaim input tax in respect of standard, reduced or zero rated sales made, but there is a de minimis calculation which can be made quarterly which relieves you of that restriction. Your VAT office will supply you with the details at the relevant time. If your exempt supplies are de minimis then all input taxes across the board can be reclaimed.

Thank you for your support.

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