First Vat return help please

hwalkerh

Just got all the info together i need to complete our first VAT return. i think most of it is straight forward but have two small questions.

1. There is a box for 'Total value of acquisitions from EC member states'

We have skpe invoices which are from Luxemburg and therefore have vat at 15% is this where i put those?

2. How do you work out VAT to reclaim on mileage claims?

For 10 miles we claim £4 (10 x 40p) through expenses. Do we claim vat at 26p? (10 x 15p= £1.50/100 x 17.5 = 26p)

Thanks from a VAT newbie

Premier_2

1. Box 9 of the VAT form relates to the acquisition of goods and related costs from other EC member states.

It is essentially for sales of goods from one EC member state registered company to another. In such cases, the seller doesn't account for VAT ... but the buyer has to in their own land at the effective rate.

In your case, you didn't purchase any goods, but a service from a Luxembourg based company who have charged VAT in their own land at their own rate. So no, you do not include it.


2. You can only reclaim VAT on the petrol content of the mileage expense. The 40p you use covers all expenses of running the car, not just petrol.
What you need to do is work out the petrol cost element. This can be using any means you feel is appropriate. We use the average miles per gallon of the vehicle and the current price of the petrol.
e.g.
if petrol is currently £112.9p inc vat, (£5.12 per gallon) and your car does say 35 miles to the gallon, then the petrol cost would be £5.12/35 = 14.6p per mile inc vat
10 miles would therefore coste £1.46 of which the vat is 22p

As long as you can demonstrate how the amount is calculated and the VAT officer believes it is reasonable, then it will be allowed.
Don't forget, you also need to have VAT receipts to cover the amount of petrol you are claiming as consumed.

hwalkerh

Thanks premier. So the service that i am claim vat back on at 15%. The vat claimed on this still goes in box 4 vat reclaimed in this period. And is included in the total spent goes in Box 7 total value of purchases?

The thing then that confuses me if how do they know that most of it is at 17.5 % but some of it is at 15%?

Premier_2

hwalkerh wrote: »

Thanks premier. So the service that i am claim vat back on at 15%. The vat claimed on this still goes in box 4 vat reclaimed in this period. And is included in the total spent goes in Box 7 total value of purchases?

The thing then that confuses me if how do they know that most of it is at 17.5 % but some of it is at 15%?

Not quite.

You can't put the figure into box 4 as you cannot reclaim the vat paid in Luxembourg as input tax against a UK VAT registration.
The only way to reclaim such VAT is to register your company for VAT in Luxembourg ... which in most cases isn't worth the hassle.

I would be inclined to leave it out of box 7 too on the basis the purchase was "outside the scope" of the UK VAT system.

JasonLVC

As Premier has already stated, you cannot reclaim the Lux VAT on your UK VAT return.

If the value of this foreign VAT is more than 250 euros per calendar year, you can make an 8th Directive refund via the HMRC website whereby you input the invoice details and HMRC translate and forward to Lux to process and refund - but can take around 4-5 months to process and is subject to the minimum claims value.

Also, as you are now VAT registered, you may wish to update your account with Skype, as the place of supply of telecommunications is where the customer is based, IF the customer is VAT registered in, which you now are (but you weren't previously and if you are not VAT registered, the place of supply will be where the supplier is based, thus Lux VAT applies).

hwalkerh

Seems obvious now that you can't reclaim VAT that you haven't paid in this county. Based on the fact that it is 60p per month it isn't worth the hassle.

Thanks

hwalkerh

Oh and just another thought then

if you bought a piece of equipment from America and paid VAT on it do you have to claim this back through the 8th directive?
Also sometime when you buy from other countries the postal service charge you VAT/tax?? when it goes through them so i guess you can claim that back. or am i just confusing things.

i really am a VAT newbie!

JasonLVC

hwalkerh wrote: »

Oh and just another thought then

if you bought a piece of equipment from America and paid VAT on it do you have to claim this back through the 8th directive?
Also sometime when you buy from other countries the postal service charge you VAT/tax?? when it goes through them so i guess you can claim that back. or am i just confusing things.

i really am a VAT newbie!

American goods would be VAT free when you buy them online in the USA but would get picked up by HMRC once the goods hit our shores......the goods would then be subject to DUTY and VAT.

The courier may charge an admin fee and pay the VAT on your behalf and then release the goods to you with an invoice for you to pay or if you use Royal Mail, they'll want the admin fee and VAT due to HMRC before they release the goods to you.

Once you get the goods, the duty is not recoverable (duty is a tax on goods to stop importeds from outside the EU being cheaper than home grown goods).

The VAT you pay Royal Mail or the courier both for their admin fee and the VAT on the actual goods would be recoverable as input tax (expenditure VAT) and you'd reclaim in Box 4 as normal.

So stuff from outside the EU will have VAT charged on it as it enters the country - so no need to reclaim it from any other country as the VAt is charged IN the UK.

bris

The VAT element in the mileage allowance is very small, it's been a year or two since I claimed for this but If I remember correctly it's all to do with the cc capacity of the car involved. A 2000cc car could claim on only 12p of the 40p so 10 x 12p= £1.20 VAT = 18p. The rates change regulary so you need to keep up with them http://www.hmrc.gov.uk/cars/advisory_fuel_archive.htm don't forget you also need to keep the receipts relating to this.

Premier_2

bris wrote: »

The VAT element in the mileage allowance is very small, it's been a year or two since I claimed for this but If I remember correctly it's all to do with the cc capacity of the car involved. A 2000cc car could claim on only 12p of the 40p so 10 x 12p= £1.20 VAT = 18p. The rates change regulary so you need to keep up with them http://www.hmrc.gov.uk/cars/advisory_fuel_archive.htm don't forget you also need to keep the receipts relating to this.

That relates to advisory fuel rates for company cars.

The rates only apply where employers:

• reimburse employees for business travel in their company cars, or
• require employees to repay the cost of fuel used for private travel.

The rates do not apply in any other circumstances.

http://www.hmrc.gov.uk/cars/fuel_company_cars.htm

(although you could use those I suppose as arguably a reasonable basis to calculate the fuel element for an employess use of their own car)


12p per mile for a 2 litre vehicle related to diesel only and was for the period 2002-2005 only. (the petrol variant was 14p per mile in that period)

bris

Yes, sorry I put the link for reference to the allowance only. It is very similar under the relevent meaning here though. Even though the OP can claim a 40p mileage allowance only the 12p (or whatever it is for his car) can be claimed for fuel. The balance is for other running costs of the car, servicing etc. Like I said it's been a couple of years since I did it, but this is the way I was shown. I appologise if I am wrong.