Do I add VAT number to every purchase - feat. Brexit

theviewer1985

Hey,

I am semi-newly VAT registered and I have two newbie questions

1. When I buy things online (personal) I quite often get a box in the address section that says "enter VAT number if a business". Ive tried this out a couple times, and both times it removes the VAT cost from the order. First of all, should I be adding it to everything I buy, including personal items... is that a benefit of being VAT registered? Or should I only be adding it to purchases FOR the business?

1a. Presumably it can only be to items FOR the business, in which case, how "flexible" is that? I cant perceive any way in which I would be busted for buying a $100 of moisturiser from Australia and adding my VAT number to get the 20% off. I just cant see how that is enforced...

2. Now, as I said I did this a couple times over the months and it worked. But in this last week I've tried it in 2 different shops and both times it says my VAT number is invalid. For the sake of privacy, I wont put my VAT number here, but just take my word that it 100%, is valid. To be certain, I do check other random UK VAT numbers I find when this error happens, and they all fail.

The last time I tried it I got this error message, which was a little telling: 

GBxxxxxxxxx is not a valid EU VAT number or the VAT number can't be validated at the moment.

This makes me think of that big B word that shall not be mentioned. As much as I hate the B word, I'm sure it isn't 'meant' to stop VAT removal from working, but perhaps its a symptom. For example, my tech brain thinks that maybe payment gateways / ecommerce shops / VAT validators haven't been updated yet? Like, they might use some EU checker and of course fail in the process.

Could that be possible? Otherwise, any other ideas why UK VAT numbers could be getting spat out?

Cheers

penners324

Were you buying products from the EU priority to 1st January 2021?

If so the VAT is reversed charged, your business would then include it as a sale and purchase VAT on the next return.

We're no longer in the EU so the above no longer applies. Your EU suppliers should be sending invoices without VAT as you're Out of Scope of VAT.

What's this random comment about Australia? They aren't in the EU and don't run a VAT scheme.

theviewer1985

penners324 said:

Were you buying products from the EU priority to 1st January 2021?

If so the VAT is reversed charged, your business would then include it as a sale and purchase VAT on the next return.

We're no longer in the EU so the above no longer applies. Your EU suppliers should be sending invoices without VAT as you're Out of Scope of VAT.

What's this random comment about Australia? They aren't in the EU and don't run a VAT scheme.

When I buy from Australia, it asks me to add my VAT number if I am a business. When I add my number it gives the error message: not a valid EU VAT number or the VAT number can't be validated at the moment. 

I know they aren't in the EU lol - but that error is very much EU related.

Ive always been buying from the EU for my lifetime, but not as a VAT registered business. Although don't focus to much on the EU / Brexit thing, I was just gassing on... my core question could be simplified into "Why would all UK VAT numbers be getting rejected when buying online from from certain shops inside and outside the EU"

penners324

What website are you using? Maybe the Australian company has an EU subsidiary doing it's selling

theviewer1985

penners324 said:

What website are you using? Maybe the Australian company has an EU subsidiary doing it's selling

You can go here, add an item to your cart, add a UK VAT number and see what I mean: https://eczemarelief.com.au/buy-online/robertsons-skin-repair-ointment-single/

Just to clarify, this isnt solely a problem on this site. UK Vat numbers being rejected, has also happened to me when using a European website to buy some music software.

sheramber

it does say a European company with an EU VAT number. You are no longer  European company.

You would be better contacting HMRC  VAT enquiries.

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-enquiries

theviewer1985

sheramber said:

it does say a European company with an EU VAT number. You are no longer  European company.

You would be better contacting HMRC  VAT enquiries.

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-enquiries

Ah so it is just yet another Brexit con then by the sounds of it

Sandtree

theviewer1985 said:

Hey,

I am semi-newly VAT registered and I have two newbie questions

1. When I buy things online (personal) I quite often get a box in the address section that says "enter VAT number if a business". Ive tried this out a couple times, and both times it removes the VAT cost from the order. First of all, should I be adding it to everything I buy, including personal items... is that a benefit of being VAT registered? Or should I only be adding it to purchases FOR the business?

1a. Presumably it can only be to items FOR the business, in which case, how "flexible" is that? I cant perceive any way in which I would be busted for buying a $100 of moisturiser from Australia and adding my VAT number to get the 20% off. I just cant see how that is enforced...

2. Now, as I said I did this a couple times over the months and it worked. But in this last week I've tried it in 2 different shops and both times it says my VAT number is invalid. For the sake of privacy, I wont put my VAT number here, but just take my word that it 100%, is valid. To be certain, I do check other random UK VAT numbers I find when this error happens, and they all fail.

The last time I tried it I got this error message, which was a little telling: 

GBxxxxxxxxx is not a valid EU VAT number or the VAT number can't be validated at the moment.

This makes me think of that big B word that shall not be mentioned. As much as I hate the B word, I'm sure it isn't 'meant' to stop VAT removal from working, but perhaps its a symptom. For example, my tech brain thinks that maybe payment gateways / ecommerce shops / VAT validators haven't been updated yet? Like, they might use some EU checker and of course fail in the process.

Could that be possible? Otherwise, any other ideas why UK VAT numbers could be getting spat out?

Cheers

1) Its not a benefit of being VAT registered, its for people buying goods for their business. If you enter it for your personal purchases then this would be tax evasion and a criminal offence 

1a) Its not flexible at all. How enforcement is done is another matter and inevitably many people get away with adding an extra few £k to their claimed expenses, "forget" to mention a few cash payments, falsely claim VAT relief etc but the consequences are significant if HMRC decide to audit you.

2) Checks will pass or fail depending on the source db being used. The EU maintained a central db but there are replicants and alternatives on offer. Obviously we arent part of the EU so UK numbers have been scrubbed since Jan but that doesnt mean its replicated everywhere yet

In normal practice out of country sales are 0% rated for sales tax and the UK will charge import when it comes in. EU do things differently because tax is charged once in the zone to avoid border friction and so buy in Germany you'd pay their VAT and not UK but that made doing VAT return difficult because it'd be paid to Germany but claimed back form the UK so instead they introduced the B2B vat approach of waiving the VAT at point of purchase.

As we arent in the EU or EEA now its a moot point as local tax will not apply and instead UK tax will be payable on import and reclaimable like any other VAT

Sandtree

theviewer1985 said:
is that a benefit of being VAT registered? 

PS. unless you sell 0% rated goods (eg childrens clothes) or exclusively do B2B work then being VAT registered is nothing but a millstone of additional cost you either have to carry or convince your customers you are worth paying extra for over your non-VAT registered competitors who can potentially charge 20% less

penners324

What do you mean Brexit con? In the EU an EU company reversed charged the VAT so you included it in your vat returns.
As it's now an EU export VAT is not chargeable as it's an export.

The General effect is the same. There maybe some import fees to be paid by you or the seller depending on how they send it.

If the company are adding VAT to the sale then they are doing wrong.

penners324

Ah, just another brexit rant without basis