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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4970
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We have a client who dispatches machinery to the Republic of

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We have a client who dispatches machinery to the Republic of Ireland.
He carries out the normal checks required including VAT number of customer.
One customer was using a business which contained the word consultant.
Upon a vat enquiry it emerged that this customer was using a VAT number which he was not authorised to use since he had no connection with this company.HMRC are seeking our client to pay output tax of £46186 on the sale of the relevant machinery totalling £230930 Proof can be provided that the goods were dispatched. Our client at the outset obtained passport and utility bill from the customer and carried out and received a VIES VAT number validation on the business name that was provided. Had our client any further obligation to check the validity beyond this , and has he any redress?
Hello, I'm Keith and happy to help you with your question.

Your client has to report these transactions by means of an EU Sales List at intervals to HMRC and these declarations require the quotation of the VAT (or equivalent) registration number of the other party. If these have passed HMRC scrutiny then their demands for unpaid VAT appear a trifle high handed. Furthermore he cannot be expected to do more than use the VIES verification system. I suspect that HMRC are on a 'try on' rather that trying to persue an individual in the Republic.

Of course you have a right of action against your purchaser for the VAT he should have been charged initially and I would point out that this appears to be a criminal offence of obtaining money under false pretenses also. You should report his antics to the police.

I feel your client would be well advised to consult a local, trusted solicitor with experience of international trading in this matter. There is a lot of cash at stake here.

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