Responsibility concerning VAT

**pmeswani** · 9 April 2009, 09:50

Originally posted by d000hg View Post

If I hire a subcontractor and he doesn't charge me VAT on his invoices, do I have any responsibility to determine if he should be? If VAT is not mentioned on the invoice do I view that as meaning there is no vAT charged, or that it is implicitly included?
I'm working with a couple of people in Eastern Europe and only just realised than Romania is in the EU. I can claim back non-UK VAT but having done this it is not easy, you have to write a letter to the country in their own language and obtain "acceptance of VAT status" with them... it was bad enough with a Spain but for somewhere like Romania it would be a nightmare I expect!

I don't know the official answer to this, but I hope you don't mind me offering my personal opinion on ths.

Personally I think it is the sub-contractor's responsibility to charge you for VAT if he / she is VAT registered. By not requesting VAT, the sub-contractor may be liable for paying VAT on the amount he has charged you. What comes to mind is, why would he want to pay the tax man VAT and not claim that amount from you?

But it does beg the question, why doesn't he register for VAT? Is he / she trading as a Ltd company in their own country or are they self-employed? If they are self-employed, you should be worried as you would be liable for Employers / Employees tax if the contractor fails to declare it.

Therefore out of caution, I would do some checks to see how the sub-contractor is operating.

**Little'Old Me** · 9 April 2009, 13:13

If your subcontractor potential VAT supplies are less than £67K+ (2009/10) then there is no reason he should be registered for VAT.

The VAT office would only worry if he was charging you VAT using a fake VAT registration number and you claimed it back. Then you would be liable, as you are required to check that you only claim back legally paid VAT.

**Sockpuppet** · 9 April 2009, 22:31

Originally posted by d000hg View Post

If I hire a subcontractor and he doesn't charge me VAT on his invoices, do I have any responsibility to determine if he should be? If VAT is not mentioned on the invoice do I view that as meaning there is no vAT charged, or that it is implicitly included?
I'm working with a couple of people in Eastern Europe and only just realised than Romania is in the EU. I can claim back non-UK VAT but having done this it is not easy, you have to write a letter to the country in their own language and obtain "acceptance of VAT status" with them... it was bad enough with a Spain but for somewhere like Romania it would be a nightmare I expect!

No. If he does not put VAT on his invoices then its not your duty to pay it or even to anticipate it being paid.

As for Romania give them your UK VAT number and no vat will be charged on inter country transactions.

Same for you selling stuff into the EU. If they give you their vat number then you don't have to charge them vat on inter country VAT transactions.

You can check VAT numbers here: http://ec.europa.eu/taxation_customs/vies/vieshome.do

**d000hg** · 10 April 2009, 07:08

Originally posted by Sockpuppet View Post

No. If he does not put VAT on his invoices then its not your duty to pay it or even to anticipate it being paid.

As for Romania give them your UK VAT number and no vat will be charged on inter country transactions.

Same for you selling stuff into the EU. If they give you their vat number then you don't have to charge them vat on inter country VAT transactions.

You can check VAT numbers here: http://ec.europa.eu/taxation_customs/vies/vieshome.do

That's not what either the spanish guy I worked with or my accountant say. For some things VAT can be shortcut like in the UK with VAT numbers, but for services my accountant insisted I had to claim back the foreign VAT (or something along those lines, the result was the same).

Responsibility concerning VAT