VAT Registration Form - Bit Of Help Please?

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Keith,

Do HMRC not differentiate between goods and services (as mentioned by Barry)?

Regarding Box 2 - the reverse of the VAT Return states Show the VAT due (but not paid) on all goods and related services you acquired in this period from other EC Member States - There is no mention of Services here (other than related services, which I assume are services such as Delivery Charges etc.)

I have found some other information online relating to the Flat Rate scheme and Reverse Charges..

http://www.tax.org.uk/showarticle.pl?id=477

Reverse charges arise on supplies of services where the recipient of the supply has to account for the VAT due. Fully-taxable traders also then recover the equivalent amount as input tax. The output tax on reverse charges is included with other output tax in Box 1 of the VAT return and the value is included with that of other outputs and inputs. As there would be no legal requirement under a flat-rate scheme to record details of reverse charges for services, persons involved in such charges for services would no longer record any details of output or input tax or of the values of such transactions on the VAT return. The flat-rate scheme’s calculations would exclude the value of reverse charges for services.

http://www.opsi.gov.uk/si/si2002/20021142.htm

Reverse charges
55U. Section 8 of the Act (reverse charge on supplies from abroad) shall not apply to any relevant supply or relevant purchase of a flat-rate trader.

http://www.opsi.gov.uk/si/si2002/20021142.htm

The new regulation 55U provides that there is no requirement to raise a reverse charge to account for VAT on supplies from abroad where this is a relevant supply or purchase.

I am in the same position as Barry as I dont want to have to pay back a hefty sum, but on the other hand I don't want to carry on doing things wrong only to have to pay back an even bigger sum sometime in the future.

regards
David

[hrbs]

This topic may be best answered by the following example:

The desired effect of the reverse charge rules is that the trader is no worse off buying from an EEC supplier than they would be buying from a UK supplier.

For flat rate scheme traders this means that:

The gross value of the EEC supply is not included in the flat rate scheme turnover. (sections referred to by above postings).

The deemed VAT on the supply is included in box 2 (ie acquistion from member state)

For example (Flat rate scheme trader)

Supply by UK supplier: Advertising of £1,000 + VAT = payment of £1,175 to supplier and no input VAT reclaimable.

Supply by EEC supplier: Advertising of £1,000 paid to supplier + deemed VAT of £175 paid to HMRC by inclusion in box 2 of VAT Return. ie a total of £1,175 paid .

Therefore flat rate scheme trader is no worse off.

Hope this makes it clearer.

Keith