Reply to: Checking account advice

[TheCyclingProgrammer]

Pedantic point: even if your overseas client is not VAT registered in their own country, so long as it is a B2B supply of services then the reverse charge rules still apply. It's not zero rated either, it's outside the scope of UK VAT (important if on the FRS).

If client is not VAT registered then you will need to keep some other evidence that they are a business and that you are making a B2B supply.

[m0n1k3r]

Hi,

I am new to contracting but have >20 years perm experience.

I am contracting in Ireland, not close to 183 days, outside of IR35.

I am using a Ltd company and the company I invoice in based and registered in Ireland.

My accountant says I should be invoicing VAT to the Irish company then they claim it back. He said I invoice 20% (VAT is 20% in UK, 23 % in Ireland).

I'm far from an expert in these matters but this does not sound right to me. I would invoice VAT to a company based and registered in the UK only. Currently I have not invoiced them VAT.

Thoughts based on what I have written? If I am right then it looks like I need a new accountant but wanted to double check first.

Thanks,

Fire the accountant. He/she is wrong, as long as the client is registered for VAT in Ireland.

What you should be doing is getting the client's VAT id, putting it somewhere on the invoice (such as "Client VAT id IEXXXX"), the text "EU VAT reverse charged to customer" (or somesuch) and zero-rate the VAT.

How do I know? I'm an accountant.

You also need to put the right numbers in the right boxes in the VAT return, and (crucially) file the Intrastat return (eg the EU Sales List) even before the UK VAT return is due.

Alternatively, if you intend to keep contracting in Ireland and spend much time there, set up an Irish company and invoice locally there. That is, in fact, the easier option.

Also see the invoice wording provided by clearedforlanding above. That's universal for intra-EU trade.

[Newbie1]

This is resolved now. Thanks.

I was right...

[Newbie1]

You are so naive.

If you aren't being paid correctly than your relationship with the client is already damaged.

The pretence that it's the consultancy's fault or the agent's fault or the payroll company's fault is just that.

Ultimately any problems are the client's fault for not sorting out it's supply chain.

Thanks for your keyboard warrior input.

I checked what to do with accountant pre-invoice, was then given opposite information one month later, then was actually correct.

Naive to contracting? I would say yes. To this situation? Hmmmm.

[clearedforlanding]

You are so naive.

A bit harsh. He has already described himself as Newbie1. We all started somewhere.

To clarify, they are vat registered in Ireland. My company is vat registered in the uk.

Wording for intra EU invoices regarding VAT. Mine is invoicing from Spain, but adjust accordingly.

Numero IVA intracomunitario Cliente/ EU VAT Customer Number
FR69532******
SAS WS* ******
33 ALL DE C******
38*** SAINT******

These services are outside the scope of Spanish VAT.
You may be required to make a reverse charge VAT declaration under Articles 44 and 196 of EU Council Directive 2006/112/EC

[SueEllen]

If they are wrong then it could damage my relationship with the client.

You are so naive.

If you aren't being paid correctly than your relationship with the client is already damaged.

The pretence that it's the consultancy's fault or the agent's fault or the payroll company's fault is just that.

Ultimately any problems are the client's fault for not sorting out it's supply chain.

[Newbie1]

So why aren't you listening to them?

If they are wrong then it could damage my relationship with the client.

[malvolio]

Why research things? Because it stops you posting things that are wrong (as you may well have done above)..

But at least you've finally admitted that you happily post unchecked tulip as if it was fact...

I didn't say that, or anything like it. In fact I didn't make any statement at all other than "it looks right but check properly for yourself". Which is what you said. But hey, if it makes you happy.

[RonBW]

My honest advice would be to post on a forum where accountants do visit and see what their advice is (which strangely enough the OP has done)..

What would your dishonest advice be?

[eek]

Why do we need to do the research? We're not asking the question. My answer is far from comprehensive, other than pointing out that IME the accountant's advice is right but to do some background reading to understand why. Having been through the loop of bidding for UK-based work in Eire, I'm not exactly unacquainted with it all, but I'm not a qualified authority like his accountant is and legislation does shift around.

So if I can summarise your more lengthy reply - WHS.

Why research things? Because it stops you posting things that are wrong (as you may well have done above)..

But at least you've finally admitted that you happily post unchecked tulip as if it was fact...

[TheCyclingProgrammer]

A supply of consulting services from a U.K. company to a company outside the U.K. is normally outside the scope of UK VAT and as the client is in the EU is subject to the reverse charge at their end.

Your invoice should not have any VAT and should state that the supply is subject to the reverse charge.

You may also need to complete an EC sales list.

This only applies to B2B supplies and you need to keep evidence that this was a B2B supply (even if this is obvious). As the client is VAT registered in Ireland you can simply keep a record of this and include it on your invoices (if you want to be picky you could also validate their VAT number online).

There are exceptions for certain types of supply but normal consultancy services fall under the general rule. I'm surprised your accountant has got this wrong but they may not have much experience with VAT matters. Or perhaps there is some additional details about your supply that you haven't mentioned on here.

[malvolio]

My honest advice would be to post on a forum where accountants do visit and see what their advice is (which strangely enough the OP has done)..

The reason I say that is that if I look at VAT between the UK and Ireland (as unlike others here I research things before posting when I know the question is awkward) you may be falling between multiple stools depending on exactly what you are doing, how the contract has been phased and what evidence the Irish company can provide. Hence a 2nd /3rd opinion from others who are actually qualified to answer the question would be a very sensible idea.

And its the sort of question that really requires an accountant who has been through this before to answer..

Why do we need to do the research? We're not asking the question. My answer is far from comprehensive, other than pointing out that IME the accountant's advice is right but to do some background reading to understand why. Having been through the loop of bidding for UK-based work in Eire, I'm not exactly unacquainted with it all, but I'm not a qualified authority like his accountant is and legislation does shift around.

So if I can summarise your more lengthy reply - WHS.

[eek]

Thanks. That sums it up perfectly.

The company i contract for is Irish based in Ireland. IT contracting and I'm nowhere near public sector.

I don't get paid holidays, benefits etc as it's a service contract for my skills.

My advice would be to wait until Monday / Tuesday when our resident accountants appear and see what they suggest...

I think the other question is what exactly are you supplying to them and where. Are you in Dublin working in their offices or working remotely? Are you sending code to them or just providing advice?

[Newbie1]

My honest advice would be to post on a forum where accountants do visit and see what their advice is (which strangely enough the OP has done)..

The reason I say that is that if I look at VAT between the UK and Ireland (as unlike others here I research things to before posting) you may be falling between 2 stools depending on exactly what you are doing, how the contract has been phased and what evidence the Irish company can provide. Hence a 2nd /3rd opinion from others who are actually qualified to answer the question would be a very sensible idea.

Thanks. That sums it up perfectly.

The company i contract for is Irish based in Ireland. IT contracting and I'm nowhere near public sector.

I don't get paid holidays, benefits etc as it's a service contract for my skills.

[Newbie1]

To clarify, they are vat registered in Ireland. My company is vat registered in the uk.