Accountants - VAT question!
 

Hi

I have a slightly complex question that I hope someone can help me with. I have a customer in the UK who writes books. They have a publisher in the US. The publisher wishes to buy them a laptop. I will be billing the publisher in the US in pounds. The laptop will be based in the UK, but will be taken on business trips to various countries including the US.

Effectively, I am billing the US, but delivering to the UK. Do I charge VAT? :wonder:

ring customs and exise very helpfull probably say yes but you can but try

I could, but I need to do the invoice on Sunday! :(

http://customs.hmrc.gov.uk/channelsP...ent#P400_32856


Christ, that took some finding. hth :)
Sorry if it landed in the wrong place, but this will tell you all you need to know

good one 84 of 300 doooooooooooo brain lag only excuse havent had enough to drink yet but im trying really really hard

If its a boxed product it will get stopped by customs but liable for VAT on custom charges which they also charge an administration fee. The advice comes from the other half btw.

Anthony

VAT is charged on where the goods/service is delivered, in this case the UK. So effectively you are supplying goods to someone in the UK from the UK (assumption as your based in Somerset), you must charge them VAT. The fact that they are taking the item out of the country on business is not relevant as you have not exported the item.

HTH

Just to get this straight...

The writer has doen some work
The publisher is going to pay the writer by buying a laptop for them

If so the writer invoices the publisher in USD at Zero Rate as it's an export.
The publisher would then invoice the writer, also at their version of Zero Rate as it's an export from the US. The two invoices contra each other, so no money changes hands, but you would get stung for duty and VAT when the laptop arrives into the UK and clears through customs.

Think that covers it. I take it you handle his books.

Thanks everyone for the help, I think that I may not have explained everything fully. Hopefully this is a better explanation:

I am a computer reseller. I have a customer who writes books, their publisher is in the US.

My customer wants a laptop & the US publisher will be paying for it. I do not know the financial arrangement between my customer & the publisher, but I believe the publisher will retain ownership of the laptop.

I will deliver & configure the laptop to a UK address, but invoice the publisher in the US.

What do you think? :confused:

My inclination is to charge VAT as the goods are not being exported.

You got it in a nutshell. It aint being exported so you charge VAT.

The issue is :-

where you are based = UK
Point of supply/delivery address = UK
= No export so you charge VAT, makes no odds that you are billing a company in the US.

hmmm- I don't think it is as clear cut as VJ says. You are selling a laptop to a US customer, so it is an export. They are 'lending' it to a UK customer, which isn't an export. If they are not retaining ownership, they could probably be considered to be gifting it to UK man, but as they are gifting it on the basis that he writes more stuff, then it isn't a gift, but a gift with reservation, which is considered a benefit in kind by IR, so probably considered similar by customs. To be on the safe side, I would prepare an invoice of price inc vat but be sparing with the details. Call C&E in the morning and clarify and then send the corrected invoice, either charging the same amount, but with different breakdown, or charging less. I don't think you will get complaints either way

Thanks guys

I invoiced yesterday & charged VAT. I just checked with the VAT office & this is correct. It seemed pretty clear cut to them, VJ. :) The idea is that you follow the goods, who pays for it is not relevant.

Thnks again for all your help! :thumb:

Glad you got it sorted, and good to know I was correct, started doubting myself last night. :wonder:

VJ