VAT Careers can be interesting and rewarding as it is a very specialised and Niche area. Discover the Pros and Cons of working in VAT and the different areas. Introduction Value Added Tax (VAT) is a consumption tax that is applied to a wide range of goods and services. There are a wide range of rules and regulations both of a legal and compliance nature that organisations both large and small have to adhere to. As such organisations whether large or small will require human capital to apply and comply with VAT legislation and file VAT returns to HMRC on a timely basis. Working in Practice Accountancy practices come in different shapes and sizes and range from: The small self employed owner managed Practices that provide book keeping services (VAT, Payroll, Annual Accounts, Self Assessment, CIS) to small businesses Franchised Practices such as Tax Assist or CerTax Practices with 2-10 Partners that typically provide a range of accounting, Audit and Taxation services to small and medium sized businesses Larger medium sized with 10 or more partners providing Taxation, Audit, Accounting and advisory services to medium sized entities Big 4 Accountancy Firms (Deloitte, EY, KPMG, PWC that provide services to large Private Companies, Public companies such as banks, Private Equity Houses etc and services can range from Consultancy, Technology, Audit, Taxation, Accounting and more. Typically working in practice involves providing services as listed above to external businesses for fees. Therefore normally an individual will commence their career as a junior (Graduate, School or college leaver) learning the ropes from more senior staff until eventually they receive an allocation of clients to manage. As their knowledge, experience and skills improve, juniors can typically move up the hierarchy to Manager, Senior Manager, Director, Associate Partner, Partner or their equivalent. As the fees billed are per hours worked, most accountants, tax specialists, technology specialist, Partners etc that work in Practice will be required to maintain and record their hours on time sheets to support the charging out (billing) to clients. Working in Industry Working in industry is basically the other side of the coin where Accountants and Tax Advisors will look after the internal VAT compliance, VAT Accounting and VAT legal Advisory aspects of the businesses. Basically VAT roles are usually split between VAT Compliance and VAT Advisory or a combination of both. Also roles can be focused on different internal segments or divisions within an organisation. For Example in a transport company you may have the Train Division and Bus Division or in Banking you may have an Investment Banking and Retail Banking division and as such the VAT rules and their application can be different depending on which area is being covered. Typically VAT Specialists will spend time working on the following: Preparing and or reviewing internal company VAT and other related returns for submission to HMRC M anaging VAT Risk and embedding controls Ensuring Accounts Payable processes are VAT compliant Ensuring the Process for Bad Debt Relief Recovery is sound Feeding in to Senior Accounting Officer risk meetings VAT Accounting and VAT Recovery Forecasting Managing VAT P roj ec ts Maintaining and building VAT Systems Advising M anagement on VAT, Advising client facing departments on billing VAT Advising Finance with VAT reporting Providing advice on Mergers and Acquisitions (M&A) Advising on Intervention Reviewing Contracts Advising on Sourcing and Procurement to ensure VAT efficiency Advising on Establishment & Fixed Establishment Advising on Securitisation Advising on Loan Syndication Registering and de-registering companies from VAT Creating VAT Groups Advising on Business Disposals (TOGC) Advising on international aspects of VAT Working in industry can mean working for Banks, Food Companies, Retailers, Oil Companies, Car Manufacturers, Airport Operators, Train Companies, Energy providers and basically any corporate entity that's not Practice as described above. As you can imagine from the duties and tasks typically performed above, VAT is a specialist area and requires a sound understanding and knowledge of UK VAT Law, EU VAT Law, Case Law, International VAT, compliance along with solid practical experience applying this to real life day to day transactions. The more knowledge you have and experience you gain in these areas, the more illuminated you will become in the VAT world which is actually a small specialist community. Qualifications Required The following professional qualifications are usually requested for roles within VAT. ( However the list is not exhaustive) Chartered Institute of Taxation (CTA) Association of Taxation Technicians (ATT) Associate Chartered Accountant (ACA) Institute of Chartered Accountants Association of Chartered Certified Accountants (ACCA) Association of Accounting Technicians (AAT) That said, it does not mean if you do not have one of these qualifications that you can't pursue a career in VAT. Many VAT specialist gain their experience working for HMRC before moving into Practice or Industry. List of Key Skills and Knowledge Required Regardless of Individual Professional Level Thorough understanding of UK VAT Law (VAT Act) and how it is applied to every day business transactions Sound understanding of the VAT liability of various products and services. Applicable rates of VAT Good understanding of European VAT principles VAT and its impact on M&A Transactions VAT on Sourcing and Procurement Professionalism and Ethics Good IT skills. For example experience in using Excel, WORD, Power point, SAP, Sage, Zero, Alteryx etc. Excellent Communication Skills Ability to work under pressure Being Analytical and having an eye for detail Must be collaborative Understand the importance of risk mitigation Have a continuous improvement mindset Emotionally Intelligent Understand the importance of diversity and its impact on business Good commercial awareness Ability to build and maintain key relationships Good understanding of VAT accounting and its impact on P&L Understanding of VAT Groups and Establishment Principles Understanding of how billing systems work and applied VAT coding Good knowledge of and application of reverse charge VAT and its Impact on costs and P&L Knowledge of the Error Correction Notice and Protective Claim procedure. Partial Exemption Special Methods Property and Option To Tax Construction Industry Scheme (CIS) Trainee / Analyst / Graduate - Entry Level At this level, the roles in VAT will normally be about learning and providing support to Managers / Assistant Vice Presidents and Senior Managers / Vice presidents. You will be expected to rapidly grasp the basic fundamentals of VAT while studying for one of the qualifications listed above. Some of the typical duties will include: Preparing or assisting in the preparation of VAT and other returns before further stage reviews Assisting with VAT administration, chasing responses and documenting various aspects relating to projects Investigating issues and problems and reporting on these to senior colleagues Preparing procedure notes to document processes Preparing VAT journals for review and posting Helping out with the Annual Adjustment Capital Good Scheme analysis Assisting in providing advisory support to internal business areas Manager / Assistant Vice President At the Assistant Vice President level, you are more likely to be doing a lot of the heavy lifting. Some of the typical duties will include: Preparing and or reviewing VAT returns Providing advice to clients or internal stakeholders Preparing annual adjustments Assisting Senior Managers, Vice presidents and Directors on projects Building and maintaining good relations with Finance and IT Assisting accounts payable and receivable in relation to VAT coding Capital Good Scheme preparation Option to Tax Advising on reverse charges and its application Ensuring VAT is being correctly coded or booked in systems Oversight of VAT Accounting Senior Manager / Vice President The Senior Manager / Vice president / Associate Director level brings with it significantly more ownership of processes and overall responsibility of particular business areas to ensure the accuracy of VAT and other Returns and the mitigation of risk. Also will be the first point of call for client and internal advisory support. Some of the typical duties will include: Reviewing VAT and other returns to ensure their accuracy Reviewing Annual Adjustments Annual review of Partial Exemption Special Method (PESM) Ensuring that control failures are documented, fixed and monitored Reviewing and signing off of VAT accounts Assisting accounts payable and receivable in relation to VAT coding Capital Good Scheme preparation or review Advising clients on M&A, Intervention, securitisation, Invoicing, Financing etc. PESM modelling / redraft Keeping up to date with legislation and preparing impact assessments Inter-company transactions and VAT impact Managing projects Managing junior staff Mentoring, Training and coaching Junior staff Making Tax Digital implementation and review Thorough understanding of systems Preparing reports for senior management Liaising with HMRC to resolve queries Managing internal and external audits Managing VAT reporting Director Directors typically have large VAT teams to manage on either the compliance or advisory side or can be the overall Head of VAT. At this level, most of the time will be spent overseeing the team and ensuring it is working towards the stated annual objectives. Some of the typical duties will include: Setting the VAT objectives for the organisation Reporting to the CFO or Head of Tax and keeping them updated with events Advising on VAT aspects of M&A and Intervention Advising on Global E Invoicing Implementation Requirements Advising on the set up of new branches and establishments Planning and overseeing internal / HMRC Partial Exemption Special Method Reviews Holding regular meetings with HMRC to update them on business changes, new product areas etc. Overall review and sign-off of VAT and other returns Mentoring, Training and coaching the team Having regular catch-ups with key clients Having regular catch ups with external consultants and attending industry events Overall responsibility for risk and controls and ensuring they are operating correctly Liaising with internal and external auditors to plan and coordinate timings and understand scope of audits etc. Overall responsibility for ensuring new products and services have been reviewed for VAT, documented and signed off. Overall responsibility for ensuring the digitalisation of VAT. Keeping up to date with Legislation and ensuring that changes are filtered down and implemented. Ensuring that VAT is being budgeted for on costs and all significant VAT risks are reflected in the P&L Chairing regular Team meetings Ensuring that clients are engaged and happy and dealing with any complaints promptly and robustly Ensuring that a strong risk culture is embedded in the team Dealing with staff recruitment Arranging regular training for the Team VAT Careers - Key Aspects of Pursuing a Career in VAT

Ireland VAT Guide, including how VAT works in Ireland including the rules around VAT Registrtaion, VAT recovery, importing and exporting and much more. Introduction Value-Added Tax (VAT) is a tax, which is payable on sales of goods or services within the territory of the Member States of the EU. The tax, in all cases, is ultimately payable by the final consumer of the good or service. Each party in the chain of supply (manufacturer, wholesaler and retailer) acts as a VAT collector. They collect VAT from their customer and include that VAT in their VAT return to Revenue. When returning the VAT collected, they can reclaim as appropriate, VAT which has been charged to them by their suppliers. Current VAT Rates in Ireland (Effective 1 January 2023) Standard rate (23 %) Reduced rate (13.5 %) Second reduced rate (9 %) Livestock rate (4.8 %) Flat-rate compensation percentage for Farmers (5 %) Accountable Person An accountable person is a taxable person (for example, an individual, partnership, company) who: supplies taxable goods or services in the State and is registered or required to register for VAT. As such they are required to charge VAT in the State. Taxable Person A taxable person is any person who independently carries out a business in the European Union (EU) or elsewhere. It includes persons who are exempt from Value-Added Tax (VAT) as well as flat-rate (unregistered) farmers. Exemption From VAT Where a taxable person supplies only exempt goods or services, they are not generally entitled to register for Value-Added Tax (VAT). However, in specific circumstances the trader may be required to register and account for VAT. This occurs where the trader makes intra-Community acquisitions , or is in receipt of services from abroad. Likewise, a taxable person who also supplies taxable goods or services may be required to register for VAT. However, VAT registration relates to your taxable supplies. Therefore, if you carry out both exempt and taxable activities, you can only reclaim VAT relating to your taxable activities. VAT Registration Generally, you must register for VAT if you are an accountable person . A person carrying out only exempt activities or non taxable activities may not register for VAT. However, a person carrying on exempt activities or non taxable activities may have to register for VAT in certain situations, for example: acquiring goods from other Member States or receiving services from abroad . If you have set up a business but have yet to supply taxable goods or services, you may reclaim VAT on your start-up costs. However, to do so you are required to register for VAT. This will enable you to obtain credit for VAT on purchases made before trading begins. Traders whose turnover is below the VAT thresholds, farmers and sea fishers are not generally obliged to register for VAT. They may, however, elect to register for VAT. VAT Registration Thresholds Value-Added Tax (VAT) registration is obligatory when your turnover exceeds, or is likely to exceed, the VAT thresholds. The thresholds depend on your turnover in any continuous 12 month period. The threshold for intra-Community distance sales of goods and cross-border telecommunications, broadcasting and electronic (TBE) services relies on your turnover in a calendar year. If the turnover is less than a threshold limit, you may elect to register for VAT. The principal thresholds are as follows: €37,500 in the case of persons supplying services only. €10,000 for taxable persons making mail-order or intra-Community distance sales of goods and cross-border TBE services into the State. The threshold is calculated by taking account of the suppliers, or deemed suppliers , total value of intra-Community distance sales of goods and cross-border TBE services to customers in all European Union (EU) Member States. The threshold only applies where the supplier is established and has their permanent address, or usually resides, in only one Member State. Otherwise the supplier must register for Irish VAT in respect of such supplies. See the intra-Community distance sales of goods and the Electronically supplied services webpages for further information. €41,000 for persons making acquisitions from other EU Member States. €75,000 for persons supplying goods. €75,000 for persons supplying both goods and services where 90% or more of the turnover is from the supplies of goods. However, while all goods and services are part of the turnover, the 90% does not necessarily include all goods sold. The 90% figure does not include goods which you: sold at the standard or reduced rates and manufactured or produced from zero rated materials. A person, while not established in the State, needs to register and account for VAT if that person supplies: taxable goods to ‘taxable customers’ in the State or services to ‘taxable customers’ in the State. This applies irrespective of the level of turnover. How is Turnover Determined Your turnover figure may exceed the threshold limit. However, you may not be required to register for VAT. For registration purposes, the turnover figure may be reduced by the amount of VAT paid on stock bought for re-sale. You should use this reduced turnover figure to see if you can register for VAT. This adjusted turnover figure is used only for the purposes of determining your turnover for registration for VAT. Example Michael has an annual turnover of €80,000. He has incurred VAT on his stock purchased for re-sale in the amount of €11,220. Michael can reduce his turnover figure by the €11,220 when determining whether he has breached the threshold. €80,000 minus €11,220 equals €68,780. As the adjusted turnover is below the registration limit of €75,000, he is not obliged to register. Requirement to Register where Goods or Servic es Purchased from Abroad Usually the following persons would not need to register for Value-Added Tax (VAT) in the state: Non VAT registered businesses Exempt businesses such as banks Public bodies such as local authorities, State agencies and semi-State bodies Farmers, fishers or race horse trainers. But they may have to register and account for VAT, for received taxable services from outside the State or Intra-Community Acquisitions. Exempt and Certain Non Taxable Persons Acquiring Goods Within the EU Exempt persons and certain non-taxable persons are obliged to register and account for VAT in certain situations. Such situations include where they buy or are likely to buy, goods from other Member States. You need to register when the goods exceeds, or are likely to exceed €41,000 in any 12 month period. Flat-rate farmers, fishers and race-horse trainers may be required to register in respect of receiving such goods, subject to the relevant threshold. They can retain their unregistered status in respect of their farming or fishing activities. You may not reclaim VAT if you are an exempt or non-taxable person. Exempt and Certain Non Taxable Persons Receiving Services From Abroad (Reverse Charges) Exempt persons and certain non-taxable persons must register and account for VAT if they receive taxable services from abroad. This obligation arises irrespective of the value of those services. Flat-rate farmers, fishers and race-horse trainers need to register if they receive such services. They can retain their unregistered status in respect of their farming or fishing activities. You may not reclaim VAT if you are an exempt or non-taxable person. Paying VAT on Services Received from Abroad (Reverse Charges) You must pay VAT on the invoiced amounts at the appropriate Irish VAT rate to Revenue in your periodic VAT return. You may qualify to reclaim the VAT at the same time. By passing your VAT number to the supplier, you will avoid paying VAT in the other Member State. For M ore Information on Registering f or VAT Click this Link Registering for VAT Modernisation of VAT & Implementation of e - Invoicing The Irish Revenue has published a report on the Modernisation of VAT and the Implementation of e - invoicing in Ireland including the adoption of VIDA and a phased approach for e - invoicing from 1 November 2028. Please see the report link below. VAT Modernisation - Implementation of eInvoicing in Ireland Other Key Areas of VAT Charging VAT VAT Invoices Financial Services Agriculture Import & Export e commerce Accounting for VAT Property VAT on Services VAT on Goods VAT Recovery Non Established Credit Notes Self Billing VAT Records Construction Rev Chgs CG Scheme Retail Export Ireland-VAT Guide - Key Aspects of Irish VAT

VAT and Charities - Charities and VAT - Comprehensive guide on how VAT is applied to services supplied by charities and the purchases they make including the rules around VAT recovery. What are Charities A charity is an institution that is established for charitable purposes and public benefit only. It can't be set up for both charitable and non charitable purposes and also be considered a charity. A charity’s purpose is usually set out in the ‘objects clause’ of its governing document (the legal document that creates a charity and says how it should be run). For a charity to be legal, it must be registered with the Charities Commission and HMRC (if it wants to benefit from reduce rates of VAT and Zero Rating) Charities can carry out trading activities, provided they are for raising money for their charitable cause. Non charitable purposes are as follows: Political Purposes Non charitable p urposes Unlawful purposes Examples of charitable purposes: The prevention or relief of poverty The advancement of education The advancement of religion The advancement of the arts, culture, heritage or science Environmental protection Development of sport Animal Welfare Womens rights Charities and VAT Charities that trade and make taxable supplies will be required like any other business to register for VAT where their turnover exceeds £90,000. Similar to other enterprises, charities can register for VAT volunarily if they want to claim back VAT from HMRC on their purchases. Note - this is only benificial if the charity is making taxable supplies (standard, reduced or zero rated). If the charity is making purely exempt supplies, then any input VAT incurred will be irrecoverable. Like many normal businesses, charities can make either Standard Rated, Reduced rate, Zero Rated or Exempt sales or supplies. In addition to these a charity can make non business related supplies which are deemed outside the scope of VAT. VAT Recovery Similar to other businesses, the level of VAT recovery by charities is determined by the nature of the supplies it makes. If it makes wholey taxable sales, then it will be able to recover all of the input VAT on its business related activities. If it makes solely exempt sales, then it will not be able to recover input VAT in relation to the business portion of these sales. If it makes a mixture of exempt, standard, reduced and zero rated supplies then it will be able to recover a portion of the input VAT it has incurred on business related activities. In this case, the proportion of VAT recovery on its business expenses is determined using a formula normally based on Taxable Sales (including zero rated and reduced rate) / Total Sales (Std, Zero, RR, Exempt) = VAT Recovery Rate Percentage Types of Income normally Generated by Charities and the VAT liability Revenue from Admission to Buildings such as museums, art galleries etc = Standard Rated 20% ( unless admission fee is for fund raising event or is covered under the cultural events exemption) Revenue in the form of Donations in exchange for admission to the event = 20 % Revenue from Advertising in Brouchures = Standard Rated 20% (unless advertising on behalf of another charity) The sale of advertising space in brochures or programmes for a fundraising event is exempt from VAT. But the sale of such space to another charity can be zero-rated. The sale of advertising space in brochures or programmes for a fundraising event is exempt from VAT. But the sale of such space to another charity can be zero-rated. Revenue from affinity credit cards where the charity allows a card provider, bank or other financial institution to access to the charity’s membership or mailing lists or mailing of the card provider’s promotional literature to members, endorsement of the card and marketing of the card by the charity to its members or supporters, the right to use the charity’s name and logo on the card and on the card provider’s promotional literature = Outside the Scope of VAT 80 % and Standard Rated 20% If the charity is acting as an intermediary and engaging with members to take up services from the card provider, bank etc then the services are likely to be Exempt from VAT Sale of donated items in a charity shop = Zero Rated (conditions apply) Sale of donated items at a fund raising event = Zero Rated Goods purchased for resale by a charity = Standard Rated 20 %, Zero Rated if childrens clothes or books Catering at a fund raising event = Exempt Education and Training = Exempt Sponsorship = Standard Rated (where the charity provides something in return) If nothing iss provided in return then maybe able to treat as non business expense and outside the scope of VAT Grant Funding = Outside the Scope of VAT (provide nothing is supplied by the charity in return) Hiring out of Buildings and Halls = Exempt (unless opted to tax and this standard rated) Note: the above Revenue streams are not exhaustive and or the conditions that apply. For more detailed information, please read the below HMRC notice in the link attached. VAT Relief on Purchases made by Charities Certain goods and services are zero-rated or reduced-rated when bought by charities, regardless of whether the charities are registered for VAT or not. For each of these reliefs specific conditions have to be met. Charities wishing to take advantage of these reliefs must provide their suppliers with eligibility declarations certifying that the conditions have been met for that relief. Advertising services provided to charities = Zero Rated Fuel and Power used for qualifying purposes such as heating a childrens home or home for the elderly = Reduced Rate 5% The construction of buildings, and certain works to protected buildings, intended to be used solely for non-business purposes can be zero-rated subject to certain criteria being met. For more information on VAT relief for charities, please see the HMRC link below. VAT for charities: What qualifies for VAT relief - GOV.UK Autumn Budget 2025 From April 2026, a new VAT relief will be introduced for businesses that donate goods to charities. The relief removes the requirement for businesses to account for VAT on eligible goods that are donated for onward distribution or use in a charity or eligible organisation’s services. Value limits will apply to donated items to safeguard against misuse, with higher limits available for listed goods. See link to HMRC policy paper below. VAT relief for business donations on goods to charities -Contains public sector information licensed under the Open Government Licence v3.0. Charities And VAT - Guide on How VAT is Applied

Automation of VAT compliance - Buy-Build-Outsource models and current systems Automation of VAT Compliance Buy One Source GVRT SAP SOFY XERO Avalara SAGE Vertex Quickbooks Build Alteryx MS Power BI Oracle Tableau Anaplan SAP API's Tax Engine Excel Outsource Full Partial e filer SLA's On Shore Off Shore Risk vs Reward Outsourcer Cost / Benefit Risk and Control Framework Data Lineage Artificial Intellegence Electronic Invoicing Note the position of systems in the boxes above do not represent any rankings and are purely randomly positioned.

VAT and Crypto Currencies - VAT liability and Rules Introduct ion Crypto - Assets are digital tokens such as crypto-currencies or NFT's (Non Fungible Tokens) which are cryptographically secured digita l ly and are valued like any other asset and can be: Transferred Stored Digitally Traded Electronically Crypto Assets are secured using Block Chain or Digital Ledger Technology (DLT) which is a digital system that records details of transactions in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administration functionality. The ledger acts as an immutable record of all the transactions that have happened within the network previously. Due to its secure nature, the concept of DLT is generating interest in many sectors including banking and fintech. A well-known application of DLT is the Bitcoin blockchain, which acts as a public record of all the transactions that have ever taken place. Cryptocurrencies and VAT There are a number of different types of cryptocurrencies such as Exchange Tokens (bitcoin) , Stablecoins, Unity Tokens etc and using them as payment for goods or services supplied instead of money does not change the the requirement to account for VAT. VAT is due in the normal way on any goods or services sold in exchange for Crypto Asset Exchange Tokens. The value of the supply of goods or ser vices on which VAT is due will be the pound sterling value of the exchange tokens at the point the transaction takes place. The Specific VAT Treatment for Bitcoin and other similar Crypto Assets is as follows: Exchange tokens received by miners for their exchange token mining activities will generally be Outside the Scope of VAT No VAT will be due on the exchange of tokens itself when using them to buy and sell goods and services Any charges levied for arranging the transaction will be Exempt from VAT under Item 5, Schedule 9, Group 5 of the Value Added Tax Act 1994. Case Background to VAT Treatment for Bitcoin Currency Exchange Trading In 2014, HMRC decided that under Item 1, Group 5, Schedule 9 of the Value Added Tax Act 1994, the financial services supplied by bitcoin exchanges - exchanging bitcoin for legal tender and vice versa - are exempt from VAT. This was confirmed in the Court of Justice of the EU (CJEU) in the Swedish case, David Hedqvist (C-264/14). Mr Hedqvist planned to set up a business which would exchange traditional currency for bitcoin and vice versa. Mr Hedqvist did not intend to charge a fee for this service but rather to derive a profit from the ‘spread’ (the difference between his purchase and sell price). Questions were referred to the CJEU on whether such exchange transactions constitute a supply for VAT purposes and if so, would they be exempt. The CJEU referred to the judgment in First National Bank of Chicago (C-172/96) and concluded that the exchange transactions would constitute a supply of services effected for consideration. The Court also ruled that the exchange of traditional currencies for non-legal tender such as Bitcoin (and vice versa) are financial transactions and fall within the exemption under Article 135(1)(e) of the VAT Directive. A supply of any services required to exchange the exchange tokens for legal tender (or other exchange tokens) and vice versa, will be exempt from VAT under Item 1, Group 5, Schedule. 9, of the Value Added Tax Act 1994. -Contains public sector information licensed under the Open Government Licence v3.0. Crypto and VAT

Discover and understand the rules and requirements around VAT Invoicing, including what constitutes a valid VAT invoices, when must they be issued, tax point rules and much more. Introduction The creation and issuing of VAT invoices forms an integral part of the VAT reporting process and VAT Registered businesses must issue an invoice for any standard rated or reduced rate services they supply. The invoice then acts as evidence for the purchaser to enable them to recover the VAT charged from HMRC if they are registered for VAT and make taxable supplies themselves. Note: VAT invoices are not required to be issued for Exempt or Zero Rated Supplies. A VAT invoice must normally be issued within 30 days of the tax point arising. The 30 day time limit can be extended without applying to HMRC in the following cases: You’re awaiting VAT invoices from your own suppliers or sub-contractors An extension of the 14 day limit has already been approved Special accounting arrangements have been approved Where a business has been newly registered but have not been notified of your VAT registration number - 30 day rule starts from date the business is advised of their new VAT registration number Tax Point Rules Tax points are the specific points in time when sales of goods or services take place and are governed by rules set out by HMRC. VAT registered businesses must account for VAT within the period the tax points for their sales occur. So if a tax point occurs in March and the businesses next VAT return period is January to March then the VAT on the sale will have to be included within the VAT return quarter ending March. Basic Tax Point Goods - The date when you send them to your customer or the customer takes them away or for goods assembled at a suppliers premises, when the goods are made available to the customer Services - The date when the service is performed — it’s normally taken as the date when all the work except invoicing is completed Actual Tax Point The basic tax point will be overridden if an actual tax point is created. An actual tax point is created when: An invoice is issued or payment is received (whichever is first) before the basic tax point. An invoice is issued up to 14 days after the basic tax point You do not have to follow the 14 day rule, but if you decide not to you must tell HMRC by writing to the VAT Written Enquiries Team . If you wish to have an extension of the 14 day rule, then you must apply to HMRC by writing to the VAT Written Enquiries Team , giving your reasons. Note: Failure to tell HMRC about extending the 14 day rule will result in the tax point reverting to the basic tax point. Continuous Supplies of Services If you supply services on a continuous basis and receive payments regularly or from time to time, there’s a tax point every time you issue a VAT invoice, or receive a payment, whichever happens first. If payments are due to be made at regular intervals (for example, by banker’s order or direct debit), you can issue a VAT invoice at the start of any period of up to one year (provided that more than one payment is due in the period) to cover all the payments due in that period. For each payment you should set out the: VAT-exclusive amount Date on which the payment is due Rate of VAT VAT payable If you decide to do this, you do not have to account for tax on any payment until the date on which it is due, or date you receive it, whichever happens first. Your customer must not reclaim, as input tax, any VAT shown on the VAT invoice until the date on which the payment is due, or you have received the payment, whichever happens first. The same procedures apply to continuous supplies of goods, in the form of water, gas and electricity. Goods supplied on sale or return, approval or similar terms When you supply goods on sale or return, for example, they have not been sold and you still own them until such time as they’re adopted by your customer. Adoption means that the customer indicates a wish to keep them. Until your customer does so, your customer has an unqualified right to return them at any time, unless you have agreed a time limit. You may have fixed a time limit of adoption of less than 12 months from the date when the goods were sent. If a time limit has: Been fixed for a period of 12 months or less, then the Basic Tax Point is the date the time limit expires Not been fixed or fixed for a period of more than 12 months, then the Basic Tax Point is 12 months from the date when the goods were sent Note: In either case if your customer adopts the goods before the time limit expires the date of adoption becomes the basic tax point. Also the basis tax point as mentioned above will be overridden by the actual tax point on the date an invoice issued by the business providing the goods or the date payment is received for the goods, which ever is earlier. If you receive a payment which is not returnable, this will normally indicate that the goods have been adopted. The payment of a deposit required as a condition of delivery — which is repayable if the goods are returned — does not constitute adoption. Finally, It is a businesses responsibility to make sure that its customers notify them promptly when they have adopted goods. Goods taken for personal or other non-business use Goods that are taken out of a business: Permanently for non-business use will have a basic tax point on the date when the goods are taken or set aside for this purpose Temporarily for non-business use, but they’re still part of its stock or business assets, then a tax point is triggered each time they’re used or — if the non-business use continues over a period of time — on the last day of each tax period that the goods are used or made available for that purpose What Details are Required on an Invoice A sequential number based on one or more series which uniquely identifies the document The time of the supply (tax point) The date of issue of the document (where different to the time of supply) Your name, address and VAT registration number — you may issue invoices under a trading name, but you must show the name and address under which you’re registered for VAT somewhere on the document The name and address of the person to whom the goods or services have been supplied (your customer) A description sufficient to identify the goods or services supplied For each description, the quantity of the goods or the extent of the services, the rate of VAT, and the amount payable excluding VAT — this can be expressed in any currency The gross total amount payable, excluding VAT — this can be expressed in any currency The rate of any cash discount offered The total amount of VAT chargeable — this must be expressed in sterling The unit price Invoicing in a foreign currency For VAT Invoices issued in a foreign currency for supplies of goods or services that take place in the UK, the total amount of VAT payable must be converted into sterling. This must be done on the following basis: (a) unless you have adopted one of the alternatives set out in (b) or (c), you must use the UK market selling rate at the time of the supply — the rates published in national newspapers will be acceptable as evidence of the rates at the relevant time (b) as an alternative, you may use the period rate of exchange published by HMRC for customs purposes — the VAT general enquiries helpline can give you details of particular period rates, you may adopt this alternative for all your supplies or for all supplies of a particular class or description — if you opt for only a particular class or description, you should make a note of the details in your records at the time of adoption You do not need to notify HMRC in advance if you wish to adopt this alternative, but having made such an option, you cannot then change it without first getting agreement by writing to the VAT Written Enquiries Team (c) you may apply in writing to the VAT Written Enquiries Team to use a rate — or method of determining a rate — which you use for commercial purposes but which is not covered by (a) or (b) In considering whether to allow such applications, HMRC will take into account: Whether the proposed rate or method is determined by reference to the UK currency market Whether it is objectively verifiable The frequency with which it’s proposed to update it (forward rates or methods deriving from forward rates are not acceptable) Whatever rate or method you adopt, the appropriate rate for any supply is that current at the time of the supply. Credit Notes Where businesses need to correct mistakes or make changes to the amounts charged on VAT invoices already issued to customers, they can do this by raising a credit note. This will have the effect of either decreasing or simply cancelling the values on a invoice previously issued to a customer. To raise a credit note and for it to be valid, the following conditions must be met : Reflect a genuine mistake or overcharge or an agreed reduction in the value of the supply, and be issued within 14 days of the refund payment being made to the customer Give value to the customer, that is, represent a genuine entitlement (or claim) on the part of the customer for the amount overcharged either to be refunded or offset against the value of future supplies Details Required on a Credit Note The identifying number and date of issue The name, address and registration number of the supplier The name and address of the customer A description which identifies the goods or services for which credit is being claimed or allowed The quantity and amount for each description The total amount credited, excluding VAT The rate and amount of VAT credited (expressed in sterling) The number and date of the original VAT invoice or invoices relating to the supply — if you cannot do this (for example, because returned goods cannot be identified with a particular invoice), you must be able to satisfy HMRC by other means that you accounted for VAT on the original supply Credit Notes Issued Without VAT Adjustment If credit notes are issued without a VAT adjustment, they should state ‘This is not a credit note for VAT’. Even if you and your customer decides not to adjust the VAT on credit notes which pass between you, you will still need to adjust your records of outputs and inputs in order to complete your VAT Return. Debit Notes Where businesses need to correct mistakes or make changes to increase amounts charged on VAT invoices already issued to customers, they can do this by raising a debit note. This will have the effect of either increasing or simply cancelling the values on a invoice previously issued to a customer. To raise a debit note and for it to be valid, the following conditions must be met : Reflect a genuine mistake or undercharge or an agreed increase in the value of the supply, and be issued within 14 days of the increase being agreed between the supplier and the customer Details Required on a Debit Note Identifying number and date of issue Name, address and registration number of the supplier Name and address of the customer Identifying number and date of issue of the VAT invoice or invoices relating to the supply for which there is an increase in price A description sufficient to identify the goods or services supplied to which the increase in price applies The amount of the increase in price, excluding VAT The rate and the amount of VAT debited (expressed in sterling) Note: Credits for zero-rated or exempt supplies included in a credit or debit note must be totaled separately and the note must show clearly that no VAT credit has been allowed for them. Consideration: Change in consideration: Regulation 38 Regulation 38 ( VATSC06630) requires businesses to adjust their VAT account where there has been a change in the value of the consideration for a supply of goods or services and a corresponding change in the amount of VAT charged. The regulation refers explicitly to a change in consideration between a person who makes the supply and the person who receives the supply and not a transaction between a supplier and an unconnected consumer further down the supply chain. The change in value can happen many years after the original supply, for example, when a business fails to deliver goods or perform services and the price is reduced or cancelled. Where this regulation applies, both the taxable person who makes the supply and a taxable person who receives the supply shall adjust their respective VAT accounts in accordance with the provisions of this regulation. Regulation 38 applies when the price paid for a supply changes at a later date so it covers both increases and decreases in the value of a supply. It can only be used where there is an agreed change in the value of consideration between the parties to a transaction, for example: Goods supplied under a hire-purchase, conditional sale or lease-purchase agreement, being returned to the supplier; Customers qualifying for a contingent discount; Goods supplied being found defective, and a reduced price being negotiated In these circumstances, the legislation places a clear obligation on the parties to adjust their VAT account. Such changes will be evidenced by a credit note or a debit note. If the change in consideration takes place in the same VAT period as the original supply then the adjustment will be made in that same VAT period before any VAT has been accounted for to HMRC and so is not a Regulation 38 adjustment. VATBDR2500 explains that Regulation 38 may be used where goods supplied under hire purchase agreements, or similar, are repossessed, and the value of the supply made has been altered but: Regulation 38 can’t be used to adjust for default and unpaid amounts; these are subject to the bad debt relief rules VATBDR3600 . Regulation 38 cannot be used as an error correction mechanism or where no supply has taken place (see VATREC13100). Electronic Invoicing As the Global Financial System continues to become more integrated and digitalised, many companies are adopting to invoice their clients electronically. From a HMRC perspective, Electronic invoicing is acceptable provided the invoices continue to meet the same invoicing requirements as manual invoices. Companies do not have to inform HMRC that they intend to start issuing electronic invoices but must adhere to the same rules as manual / physical invoicing. Electronic Invoicing is basically the generation, storage and transmission of invoices electronically without the need for paper invoices. This has the benefit of improving a transactions audit trail, reducing storage space, speedy retrieval and better security etc. Conditions For Electronic Invoicing You can find out more about the HMRC conditions for electronic Invoicing and storage in the following HMRC Notice. Electronic invoicing (VAT Notice 700/63) -Contains public sector information licensed under the Open Government Licence v3.0. VAT Invoicing - Guide on the HMRC Rules and Tax Points

UK VAT explained including when businesses are required to register for VAT, HMRC rules and how VAT is applied to different types of goods and services and when VAT can be recovered. VAT (Value Added Tax) is a tax on consumption and is added to the sale of goods and services supplied by VAT Registered businesses. Not all products and services sold attract VAT and there are a number of VAT rates or categories as follows: Standard Rated 20% (taxable) Reduced Rate 5% (taxable) Zero Rated (taxable) Exempt Outside The Scope Depending on the goods being sold or services being provided, one of the categories above will be applied to the sale. Standard Rated Goods and Services Standard Rated goods and services are goods sold or supplied by VAT registered businesses and include 20% VAT. Therefore invoices to customers will include 20 % VAT. Standard Rated services fall into the taxable services bucket and where businesses make taxable sales and exceed or are likely to exceed £90,000 , they are required by law to Register for VAT. Examples of Standard Rated goods and services include: Fuel Professional Services such as Legal and Accountancy Computers and Mobile phones Hotel Accommodation No Domestic Energy Alcohol Restaurant food and hot takeaways Goods and Services with Reduced Rate VAT of 5% Reduced rate VAT of 5% is mainly applied within the domestic fuel and construction industry. Examples of Reduced Rate VAT at 5% include: Domestic / residential energy bills (Gas & Electric) Gas fired boiler installation Radiator Connection or re-connection to the gas mains Renovating a dwelling that has been empty for at least 2 years Zero Rated VAT Goods and services supplied as Zero Rated VAT are taxable supplies but without VAT applied. Therefore invoices generated and sent to customers for zero rated supplies will not include VAT. Examples of Zero Rated goods and services include: Children's clothing Books Sewerage services supplied to domestic or industrial customers Water supplied to domestic households Insulation Take away - cold food Note: where businesses make sales of goods and services to non UK business customers, these can also be treated as Zero Rated in some instances as they are deemed outside the scope of UK VAT but are classed as taxable services which carry the right to deduct Input VAT. (Please see place of supply button) Exempt Goods and Services Exempt supplies of Goods and Services unlike standard rated and zero rated are not taxable supplies. Exempt supplies are listed in the VAT Act 1994 Sch 9 and include the following: Postal Services Insurance Land and Property Rental Education Financial Services VAT Registration Businesses in the UK (including Isle of Man) are required to register for VAT If the value of their Taxable Turnover (standard rate, reduced rate and or zero rated supplies) in the preceding 12 months or less goes over the registration threshold of £90,000 If the value of their taxable turnover (standard rate, reduced rate and or zero rated supplies) is likely to exceed £90,000 in the next 30 days if the business is based outside the UK and supplies goods or services in the UK or are expected to in the next 30 days. (Threshold does not apply here) If a businesses is being acquired by a VAT registered business as a going concern If you make distant sales into Northern Ireland and exceed the annual threshold. Note: Businesses include Sole Traders, Partnerships, Limited Companies, Clubs, Associations. What is Taxable Turnover Standard Rated Sales of goods and services Zero Rated Goods and Services Reverse Charge Output VAT Any Goods or Services you barter or part exchange The value of any goods you have used for private use Property services supplied (rent and service charges) where you have opted to tax the building. What is not Taxable Turnover Sales of capital items such as buildings , machinery, cars Exempt supplies Voluntary Registration Yo u can apply to HMRC for voluntarily registration if: you are making taxable supplies where their value is under the £90,000 threshold. This will allow you to recover VAT expenses incurred. You are intending to make taxable supplies in the near future Register - onl ine here Tax Point R ules Tax points are the specific points in time when sales of goods or services take place and are governed by rules set out by HMRC. VAT registered businesses must account for VAT within the period the tax points for their sales occur. So if a tax point occurs in March and the businesses next VAT return period is January to March then the VAT on the sale will have to be included within the quarter ending March VAT return. Basic Tax Point Goods - The date when you send them to your customer or the customer takes them away or for goods assembled at a suppliers premises, when the goods are made available to the customer Services - The date when the service is performed — it’s normally taken as the date when all the work except invoicing is completed Actual Tax Point The basic tax point will be overridden if an actual tax point is created. An actual tax point is created when: An invoice is issued or payment is received (whichever is first) before the basic tax point. An invoice is issued up to 14 days after the basic tax point You do not have to follow the 14 day rule, but if you decide not to you must tell HMRC by writing to the VAT Written Enquiries Team . If you wish to have an extension of the 14 day rule, then you must apply to HMRC by writing to the VAT Written Enquiries Team , giving your reasons. Note: Failure to tell HMRC about extending the 14 day rule will result in the tax point reverting to the basic tax point. Continuous Supplies of Services If you supply services on a continuous basis and receive payments regularly or from time to time, there’s a tax point every time you issue a VAT invoice, or receive a payment, whichever happens first. If payments are due to be made at regular intervals (for example, by banker’s order or direct debit), you can issue a VAT invoice at the start of any period of up to one year (provided that more than one payment is due in the period) to cover all the payments due in that period. For each payment you should set out the: VAT-exclusive amount Date on which the payment is due Rate of VAT VAT payable If you decide to do this, you do not have to account for tax on any payment until the date on which it is due, or date you receive it, whichever happens first. Your customer must not reclaim, as input tax, any VAT shown on the VAT invoice until the date on which the payment is due, or you have received the payment, whichever happens first. The same procedures apply to continuous supplies of goods, in the form of water, gas and electricity. Goods supplied on sale or return, approval or similar terms When you supply goods on sale or return, for example, they have not been sold and you still own them until such time as they’re adopted by your customer. Adoption means that the customer indicates a wish to keep them. Until your customer does so, your customer has an unqualified right to return them at any time, unless you have agreed a time limit. You may have fixed a time limit of adoption of less than 12 months from the date when the goods were sent. If a time limit has: Been fixed for a period of 12 months or less, then the Basic Tax Point is the date the time limit expires Not been fixed or fixed for a period of more than 12 months, then the Basic Tax Point is 12 months from the date when the goods were sent Note: In either case if your customer adopts the goods before the time limit expires the date of adoption becomes the basic tax point. Also the basis tax point as mentioned above will be overridden by the actual tax point on the date an invoice issued by the business providing the goods or the date payment is received for the goods, which ever is earlier. If you receive a payment which is not returnable, this will normally indicate that the goods have been adopted. The payment of a deposit required as a condition of delivery — which is repayable if the goods are returned — does not constitute adoption. Finally, It is a businesses responsibility to make sure that its customers notify them promptly when they have adopted goods. Goods taken for personal or other non-business use Goods that are taken out of a business: Permanently for non-business use will have a basic tax point on the date when the goods are taken or set aside for this purpose Temporarily for non-business use, but they’re still part of its stock or business assets, then a tax point is triggered each time they’re used or — if the non-business use continues over a period of time — on the last day of each tax period that the goods are used or made available for that purpose VAT Returns VAT Registered businesses that make supplies of goods and services are required to file their VAT returns to HMRC either monthly or quarterly (depending on VAT scheme) to pay over the Output VAT collected on sales to their customers and also to recover any Input VAT they have incurred on supplies they have purchased for operating their business. The difference between the Output VAT collected and the Input VAT incurred will form the basis as to whether VAT is payable or recoverable from HMRC. VAT collected on Sales greater than VAT incurred on purchases = Payment due to HMRC VAT incurred on purchases greater than VAT collected from customers = Recovery of VAT from HMRC Any exempt and zero rated supplies a firm makes to its customers or purchases from its suppliers also need to be included on the VAT Returns in boxes 6 and 7 respectively. Partial Exemption - VAT Recovery In addition to Output VAT that is collected by a business on its sales and then paid over to HMRC, businesses can also recover VAT on expenses they incur. The recovery of VAT depends highly on the nature of the supplies being made by the business. Business is only making Taxable Supplies (Standard rated, reduced rate or zero rated) - then the Input VAT incurred on its purchases is directly attributable to its taxable sales and can be fully recovered from HMRC. Business only makes Exempt Supplies - Then it cannot recover any of the input VAT incurred on purchases as the input VAT is directly attributable to supplies of exempt goods or services. Businesses making a mixture of Taxable and Exempt Supplies - This type of business is known as a partially exempt business and because not all of its supplies are taxable, it can only recover a calculated percentage of the input VAT it has incurred. Partially Exempt Businesses - will be required to calculate their partial exemption recovery percentage or rate and then apply this rate to their pool of input VAT that they have incurred. The standard method for calculating the partial exemption recovery rate is as follows: Taxable Sales (Standard, Zero, Reduced Rate) / Total Sales (Standard, Zero, Reduced Rate, Exempt) = VAT Recovery Rate Percentage % Example - Standard Rated Sales £1,000, Zero Rated Sales £500, Reduced Rated Sales £200 and Exempt Sales £2,000 £1,000 + £500 + £200 / £3,700 = 46 % RR If the input VAT pool is £20,000, then the business can recover £9,189 from HMRC via its VAT return. Note: Many larger and more complex businesses (such as banks) will have Partial Exemption Special Methods which will have been formulated specifically for their business and agreed with HMRC. Many businesses will have multiple internal business areas and products and as such using the standard method may not be suitable. Once formulated businesses will be required to adhere to their agreed Partial Exemption Special Methods and keep HMRC up to date on any internal business restructures that might affect the agreed method. HMRC - has the right to issue a Special Method Override where they believe the existing method in use does not produce a fair and reasonable level of VAT recovery. Annual Input VAT Adjustments As part of the VAT return process partially exempt businesses are required to complete annual Input VAT adjustments to ensure the correct amount of VAT has been recovered from HMRC for the overall year. Normally businesses will file quarterly VAT returns which include VAT recoverable for the quarter. The recovery of VAT on the quarterly returns will be based on the input VAT allocated between Taxable and Exempt sales for the quarter or based on the previous years VAT recovery rates which are being provisionally used for the current year until the annual adjustment is completed. So VAT returns completed during the year are actually provisional in terms of the recovery of VAT. As such at the end of the year input VAT recovery will need to be revisited to: Review how input VAT has been used in the business to see if there has been any change in use. (Taxable / Exempt) Recalculate VAT Recovery Rates based on the current years sales data Review input VAT allocations to different areas of the business Once the above process has been completed, the recalculated input VAT recovery for the whole year will then be compared with the input VAT reclaimed on the quarterly returns. Any under or over recovery of VAT will then be refunded or repaid to HMRC normally via the first VAT return of the following year. From a business perspective, it maybe important to carry out mid year reviews of the VAT recovery by looking at aspects such as actual VAT incurred and Actual VAT recovery rates so as to not have large swings in irrecoverable VAT which can affect P&L where the input VAT throughput is significant. (Most relevant to partially exempt businesses where VAT recovery is high). Reverse Charges Where firms purchase services from non UK suppliers that would normally have VAT applied in the UK, they will have to self account for reverse charge VAT in the UK. The purpose of this measure is to ensure UK companies have a level playing field competitively and as such ensure companies do not make their purchases abroad just to avoid paying 20% VAT. The following purchases would attract Reverse Charge VAT Legal and Accountancy services Software Advertising Consultancy For example if a UK company purchased legal services from a company in France for £1,000 then the UK company would have to include £200 on its UK VAT return as output VAT and will equally it will able to include £200 as recoverable input VAT. Note: as mentioned under partial exemption above, the level of input VAT recoverable by a business will depend on the type of sales it makes. If a firm only makes taxable (standard and zero rated supplies), then it will be able to recover the full £200 reverse charge VAT which is payable to HMRC. In this case, as the reverse charge VAT payable is equal to the reverse charge VAT recoverable and as such there is nothing to pay HMRC. If the firm also made exempt supplies to it's customers and the French legal fee charge was not related to a specific taxable supply being made by the UK company, then it would only be able to recover a portion of the £200 reverse charge VAT based on its Partial Exemption Recovery rate. On its VAT return the business would enter £200 in box 1 (Output VAT) and £200 in box 4 (input VAT recoverable) and thus box 5 ( VAT payable of recoverable from HMRC ) would be nil. The net values of the services would go in box 6 (net outputs) and (net inputs) respectively. For more information on reverse charges, please click on reverse charge button on the home page. Pre VAT Registration Expenses Where a business buys goods or services before it registers for VAT, to support taxable business activities when it is registered, it can recover the tax provided that: in the case of goods (either stock for resale or fixed assets), the goods remain on hand at the date of registration and will be used in the newly registered business. These goods must have been bought within the time limits that are set out in regulation 111; for businesses with a registration date after 1 April 2010 the time limit will be 4 years in the case of services the supply was made not more than six months before the date of registration. Six months represents a period in which it is deemed that services obtained will relate to business activity carried on at the time of registration. Tax incurred on goods on hand at registration (other than capital items - see below) cannot be deducted if the VAT was incurred outside of the time limits set out in regulation 111. This includes VAT incurred on services performed on those goods. If a business is given a backdated registration date this becomes the relevant date for working out the extent of the time limits. Businesses are not required to reduce the VAT deducted in respect of pre-registration use of fixed assets. For example, VAT incurred on a van purchased three years before registration and used before and after registration would be recoverable in full, subject to the normal rules on VAT deduction. You can only reclaim VAT on purchases for the business now registered for VAT. They must relate to your ‘business purpose’. This means they must relate to VAT taxable goods or services that you supply. Please see below HMRC link for more information. VIT32000 - How to treat input tax: pre-registration, pre-incorporation and post-deregistration claims to input tax under regulation 111 - HMRC internal manual - GOV.UK (www.gov.uk) Required VAT Records and Accounts All taxable persons must keep and preserve certain records and accounts. This VAT record-keeping requirements that anyone who is registered for VAT must comply with includes: The VAT account What records must be kept Maintaining and preserving records For more information see Record keeping (VAT Notice 700/21) . -Contains public sector information licensed under the Open Government Licence v3.0. UK VAT Explained - What is VAT & when businesses need to register for VAT

International VAT News - read our collection of international VAT news articles from multiple news websites from around the globe including UK and global sites. "Take the heavy lifting out of your role search!" International VAT News - Read the latest VAT News Headlines Updated 24/7 International VAT News articles from across the globe - providing you with up to date information on changes in global VAT & GST rates & legislation, the ongoing digitalisation of VAT functions and processes including AI and other smart technologies. VAT Digital.Com Demystifying VAT

VATDIGITAL.COM - Providing you with the latest UK and Global VAT News, VAT Compliance Guides, e Invoicing Updates, Country Guides and an AI VAT Advisor - online 24/7. About - VAT Digital.Com - UK & Global VAT News & Compliance Making VAT Simple VAT Digital.Com - Is a London based VAT News, Compliance and Technology platform designed to seamlessly "Demystify VAT " and help businesses and individuals to stay compliant by providing the latest UK & Global VAT , GST & US Sales Tax News, HMRC and other global Tax Authority updates, case law updates and analysis, VAT compliance guides & Tools, VAT calculators, country VAT guides & rates, global E invoicing mandates and implementation timelines. Our website also provides UK VAT guides and updates for specific industries and areas such as Financial Services and Banking, Energy, Construction, Charities, Hospitality & Catering, Taxis & Private Hire and much more. For specific queries on VAT and GST, please use our AI driven " VAT Advisor " for quick, immediate and reliable online guidance 24/7. We hope you find the information on this site useful and enhancing. For any queries, please email the team at enquiries@vatdigital.com or contact us using the form below. VAT DIGITAL. com VAT - TAX - Accountancy - London Anthony Ene - Founder - Accountant & Tax Specialist Our website is updated regularly by our Team of VAT and Tax specialists who have years of experience working in industry and practice. To contact us, please use the form opposite and we will endeavour to get back to you as soon as possible. Alternatively please use the "Lets chat" button. We hope you enjoy reading and find the information on our website enhancing and useful. Best Regards The Team - vat digital .com -------------------------------------------------------------------------------------------------- - Email: enquiries@vatdigital.com Submit Thanks for submitting!

Find out how VAT works in Sweden - Link to tax authority - VAT Rates on Goods and Services Introduction The Standard Rate of VAT in Sweden is 25% and is levied on most goods and services and there are reduced rates of 12% and 6% for items such as hotel accommodation and books respectively. Similar to many other EU and non EU countries, Financial Services such as Loans (borrowings and advances), Foreign Exchange, Payment Services etc are Exempt from VAT. Please click on the attached button for more details. VAT Rates Applicable to Goods & Services sweden-VAT

VAT Risk - Identifying VAT risk areas in an organisation, controls and how to mitigate against VAT errors and Introduction VAT Risk - Failure to introduce and continually develop robust controls in relation to VAT within the E2E processes in an organisation and can result in: The over-payment of VAT to HMRC Under recovery of VAT From HMRC Fraud HMRC Penalties and Fines Reputational Damage with HMRC Increase in VAT P&L Cost VAT Risk Areas Client On-boarding Risks (know your Client Failure to document and verify a client's residence or their businesses country of operation resulting in incorrect VAT determination within billing systems and thus incorrect VAT applied on invoices. Potential fines and penalties from HMRC. Failure to obtain and verify a clients VAT registration number or determine if they are in business resulting in incorrect billing for VAT and potentially aiding fraud. Potential fines and penalties from HMRC. Note - Issues such as above can usually be identified during HMRC audits where samples of client details are requested along with their country of residence or operation which HMRC will then test against VAT applied to their Invoices. Supplier On-boarding Risks Failure to obtain and verify a suppliers VAT registration details and number, potentially resulting in the invalid recovery of input VAT Failure to obtain and verify a suppliers VAT registration details and number resulting in carousel fraud where fraudulent suppliers do not pay the VAT to HMRC. Note: Domestic reverse charging in some industries like Telecoms (mobile phones etc) and the construction industry were introduced to combat this problem. Accounts Payable Risks Invalid VAT Invoices - Failure to review and validate supplier invoices to ensure they are compliant from a HMRC perspective and thus risking recovering VAT on invoices that are invalid resulting in HMRC claw-back and penalties Poorly Trained Staff - Staff with little or no understanding of VAT can result in incorrect coding of invoices for VAT and potential under or over recovery of VAT. Mistakes caused by incorrect coding will result in repeated Error Correction Notices (ECN's) having to be raised and submitted to HMRC which will attract penalties and damage the organisations reputation with HMRC Failure to Reverse Charge Non UK Supplier Invoices for Services - Invoices received from non UK suppliers for services in the majority of cases (exceptions hotels, admissions to events, overseas property transactions, non UK transport) are required to be reverse charge and thus the organisation will be required to self account for output VAT to HMRC. This is a common problem. Failure to Reverse Charge UK Supplier Invoices Subject to the Domestic Reverse Charge Rules - Supplier invoices in certain industries are subject to the domestic reverse charge where the customer is responsible for accounting for the output VAT to HMRC. This is normally the case in the construction industry, wholesale electricity and gas sales, mobile phone and computer chip industry. Processing Invoices Issued in a Foreign Currency where the VAT is not Translated to GBP - Supplier invoices issued in the UK in a foreign currency are required to display the VAT amount in GBP along with the exchange rate used. Invoices where the VAT is not translated into GBP should not be processed as they are invalid from a HMRC perspective. Application of Reverse Charge to Goods that have been Imported to the UK - Where goods have been imported into the UK and import VAT has been levied at the border or via the Postponed VAT Accounting (PIVA) procedure (where VAT is paid and recovered via the VAT return), there is no need to account for reverse charge VAT again. Procedures should be in place in Accounts Payable to identify and distinguish between invoices for goods and those for services to avoid such mistakes and potential VAT errors. Input VAT Directly Attributable to Onward Supplies to Clients - Input VAT that is directly incurred (linked) to onward supplies to clients such as legal fees will often be recharged to the clients during billing. Where the underlying deal is a taxable supply in the UK or the supply is to a non UK counter-party then the associated VAT on such third party cost can usually be recovered in Full from HMRC . If the underlying deal is a Financial Service provided to a UK counter-party and is Exempt from VAT, then the input VAT on such cost (legal fees etc) would normally be fully irrecoverable . If an organisation does not have a process in place to identify and apply the correct VAT recovery to these costs then this can result in the under or over recovery of VAT from HMRC. Third Party Costs Incurred - Input VAT can only be claimed by the recipient company as addressed on the supplier invoice. Therefore where a company pays for goods or services on behalf of a client or customer for example and the invoice is addressed to the client, then the company has no right to recover any input VAT shown on the invoice. (Even though it paid for the services). Hence VAT recovery should be blocked in such cases. Payments made Outside of the Accounts Payable System - Whereas the majority of payments made to suppliers by an organisation will usually be processed by its main accounts payable team, there can be instances where payments are made by functions directly to suppliers and thus the usual checks and application of VAT may be bypassed unintentionally. For example this can occur where front office functions pay for trading type costs direct or where self billing invoices are processed outside of the accounts payable function. The best way to monitor and mitigate against such risks is for tax teams to have regular catch-ups and with Finance, Front Office, Accounts Payable, Sourcing and other teams to identify such processes early. Accounts Receivable (Billing) Risks Manual Billing Processes - Where customer invoicing is carried out via manual billing processes such as using MS Word or Excel, errors can occur where the VAT liability determination is not automated leaving staff to apply the correct VAT treatment. If staff are inadequately trained in relation to VAT, then this can result in the issue of incorrect invoices . Applying VAT to Inter- Company Invoices issued within a VAT Group - Companies within a VAT Group benefit from VAT free invoicing among group members and as such its imperative that there are controls in place to ensure VAT is not added to inter VAT group invoices resulting in additional costs for the recipient entity. Not Applying VAT to Intercompany Invoices Issued to Non VAT Group Members - Whilst VAT will not normally be applicable to invoices issued to other entities within the VAT group, output VAT should always be applied to standard rated supplies on inter-company invoices where the UK recipient entity is not a member of the VAT Group that the issuing entity belongs to. Incorrect Static Data - It is common for billing systems to be fed with client data from static data systems to enable them to populate invoices with the name and address of clients, their VAT registration number and in some cases determine the correct rate of VAT to apply on invoices. Where the static data held for clients is incorrect or not up to date, then this will inevitably result in invoices being issued with incorrect data and rates of VAT. Inadequately Trained Staff - the application of VAT is based on a number of factors such as product type, type of customer (business / non business), customer residence / country of operation etc. If billing staff have a limited understanding of the application of VAT, then errors can occur during customer billing. Intervention and its Impact on Billing - A company may provide services to a non UK counter-party but its local branch may actually be heavily involved in providing the service. Where this occurs, some countries (France for example) may have rules in place that state that local VAT should be applied to the transaction. In such cases, even though the invoices are raised from the UK to the overseas customer, local VAT (French for example) should be applied to the invoice to ensure it complies with local VAT rules. VAT Accounting Risks Failure to Reconcile VAT Accounts - Accounting for and posting VAT correctly within the financial accounting system should always be followed up by preparing a monthly reconciliation of the output VAT, input VAT and VAT control accounts to ensure all balances are fully supported by detailed and itemised lists showing what is items and actions are required to clear the balances. For example, the output VAT balance may contain VAT payable to HMRC next month or quarter, the input VAT balances may contain VAT recoverable amounts still pending for payment from HMRC. Or both input and output VAT balances may contain amounts to be swept to the VAT control account for balancing with payments to and from HMRC. Failure to carryout reconciliations regularly can result in significant uncleared balances being built up that are not fully understood or explainable by accounting staff and can result in errors going undetected. This can also cause delays and the need to employ costly consultants to rectify when such issues are detected during annual external or internal audits. Failure to Book The VAT on Invoices Issued - There can be instances where invoices are issued and sent to customers but the VAT is not correctly booked to the output VAT account or worse booked to a revenue account which is contrary to the VAT accounting standard. This will result in the incorrect reporting of VAT to HMRC and possible penalties when the errors are detected. Note such errors can be detected by HMRC when a customer includes an issued invoice within their VAT return to recover the VAT incurred. In such cases the errors will be categorised as careless by HMRC and result in severe penalties. Sourcing / Procurement Risks Procurement for Major Contracts - There should always be a policy within an organisation for procurement teams to engage with both Legal and Tax teams prior to entering into contracts for the purchase of goods or services. It is important that such contracts are efficient for VAT in terms of ensuring that the organisation does not incur unnecessary VAT costs. A common example of this is where a firm enters into a contract with a supplier to provide global services to its organisation without considering how the contract should be formulated to ensure that local business contract for supplies directly. Also where the UK head office is the main party to the contract and the supplier bills the UK, reverse charge VAT will be a significant cost which may not be fully recoverable. VAT on such contracts will often not be budgeted for creating large unexpected costs during the yea and impacting the P&L account. Also VAT registered companies importing goods should always ensure that they actually own the goods they are importing as import VAT is only recoverable where the goods are owned by the VAT registered entity. Purchase of Goods from Overseas The importation of Goods from overseas will result in input VAT (20%) being levied at the boarder and paid to HMRC or included on the VAT return to pay and recover the VAT from HMRC under the Postponed Import VAT Accounting (PIVA) process. Input VAT is only recoverable by the owner of the goods and as such the legal owners of the goods should ensure that they are the importer of record and own the goods at the time of importation to ensure they can successfully recover the VAT paid to HMRC. New System Implementation VAT Determination - The introduction of new billing or accounts payable systems in an organisation will require close liaison with a VAT specialist or team to ensure the systems are correctly configured for VAT and more specifically to determine the correct VAT liability to apply to transactions. Regular and continuous engagement here between IT, Finance and Tax teams is critical during the build or implementation process to ensure VAT is correctly set up within the system and to avoid costly reconfiguration. Making Tax Digital Requirement - All VAT registered businesses are required by HMRC to be MTD compliant by ensuring that their billing, AP and accounting systems are digitally linked (E2E) right up to filling their VAT return to HMRC via e-filler (API link). Failure to do this will result in HMRC penalties and possible reputational damage. Automation - Although automating processes within the VAT compliance area can result in significant benefits in terms of time saving, accuracy and data quality, it can also result in over engineering and create risks if the audit trail is lost and processes are subsequently changed. It is therefore important that a complete integrity review of the existing processes is carried out prior to automation. VAT Report Design and Parameters VAT Reports Used for VAT Reporting - The design of reports that are extracted from systems to provide data for VAT reports is critical as getting this wrong can lead to significant errors within the VAT return that can continue for years leading to over paid or under recovered VAT. All reports designed for VAT reporting should go through extensive testing, review and documentation prior to deployment to avoid future errors, losses in the P&L and reputational damage. Ongoing Annual Review of VAT Report Content & Parameters - To ensure the continued accuracy of data contained in reports used for VAT reporting, it is essential that VAT report parameters and content are up to date and continue to capture all the required information including impacts of changes in tax authority rules and Government legislation. Key Man Risk Over Reliance on Key Individuals - Over reliance on individuals to manage specific processes in Finance or Tax brings with it the risk that key knowledge can simply evaporate if and when these individuals suddenly leave the business due to redundancy, illness, or simply move on to new role. Organisations can then be left exposed to VAT risks due to the inability of existing staff to complete and file correct VAT returns. Larger organisations with more complex operations may be forced to hire expensive contractors to plug the gap. To prevent this, organisations need to ensure they have robust and up to date process notes which include diagrams to illustrate key parts of processes. Rotation of staff or work sharing can mitigate against such risks becoming embedded. Changes in Business Structure Partial Exemption Special Method - PESM's are designed and agreed with HMRC to ensure there is a fair and transparent allocation of input VAT to different areas of the organisation and to ensure VAT is recovered in line with a prescribed recovery method. To ensure PESM's are up to date it is essential that tax teams hold regular and annual meetings with both revenue generating product departments and accounts payable to ensure that any changes to the business structure or new products on boarded can be reviewed and the PESM amended and re agreed with HMRC. Failure to do this will result in incorrect input VAT allocation and recovery and can be costly in terms of the P&L hit when VAT has been over-recovered and a repayment is required to HMRC. Fixed Establishment Branches and Fixed Establishment - Where UK companies set up branches overseas for example in EU countries, they need to be aware of local rules sometimes driven by case law such as Skandia and Danskie Bank (see UK news page) which can impact the VAT liability of recharges between branches and their head office and visa versa. Also where UK companies have subsidiaries overseas and those subsidiaries have UK branches that are a member of the head offices UK VAT Group, care must be taken to ensure those branches meet the criteria of having a fixed establishment in the UK. That is, they are resourced with sufficient human and technical resources and are actually providing services in the UK. Branches that are merely "brass plates" where they have few or no employees or infrastructure and have no major trading activity and are mainly conduits of overseas recharged cost, may fall foul of HMRC fixed establishment and VAT grouping rules. HMRC can de-group such branches. Services Provided to Staff via Salary Sacrifice Benefits Provided to Staff via Salary Deduction - Benefits such as car parking, bikes for work where the cost is deducted from an employees salary are vatable and Standard Rated VAT at 20% is due to HMRC on such cost. As these are not normally processed via the accounts payable team and are employee expense or payroll related, there is the risk that they will not be included in the VAT return process and overtime a significant VAT liability can build up which will eventually have to be declared to HMRC via an Error Correction Notice. As a result HMRC can impose penalties and may lead to reputational damage. VAT Risk and Control Framework Risk Documentation, Controls and Testing - To avoid and mitigate against many of the possible errors identified above, it is essential for organisations large and small to ensure that they have an internal VAT Risk and Control Framework that sets out all the potential risk that can affect the accuracy of the organisations VAT return. This will involve preparing a schedule of all the potential risks, the controls required to mitigate against these risk, who is responsible for operating each control, who has overall accountability for signing off that the controls are in place, documented and are operating correctly and finally what testing is required and the frequency. HMRC - have also recently published guides on VAT compliance and what they expect from businesses in terms of controls and the required testing of these controls to ensure VAT reporting is accurate and compliant. See links below. Help with VAT compliance controls — Guidelines for ... Help ensuring documents filed with HMRC are correct and ... Senior Accounting Officer Requirements Annual Senior Accounting Officer Compliance - Schedule 46 of the Finance Act 2009 contains the Senior Accounting Officer (SAO) provisions. These provisions apply to larger qualifying companies and require them to appoint a Senior Accounting Officer (SAO) to represent the company in confirming annually via a certificate in which they must state whether the company had appropriate tax accounting arrangements. If the company did not have appropriate tax accounting arrangements they must also explain what the shortcomings were. Penalties can be applied by HMRC in the event that: It fails to notify the name of its SAO, or If they fail to meet their main duty (though an SAO may escape a penalty if they have made reasonable efforts to rectify shortcomings), or If they fail to give HMRC a certificate within the required timescale, or they provide a timely certificate that contains a careless or deliberate inaccuracy. It is therefore even more paramount for larger companies to ensure that their risk and control environment is robust and they have adequate controls and updated process notes, flow diagrams and other documentation in place. For more information in relation to the SAO process, please see the link below to HMRC guidance in this area. Senior Accounting Officer Guidance - HMRC internal manual HMRC - Business Risk Review The Business Risk Review (BRR+) is the process by which we evaluate and discuss with the customer where we think they sit on the compliance spectrum and in particular whether they meet the criteria for Low Risk. It is based on the principle that, while factors such as the size and complexity of a business create their own risks and can make it more challenging for customers to comply with their tax obligations, even the largest and most complex businesses can be classified as Low Risk if they mitigate these risks to an acceptable level through their behaviours. The results of the BRR+ inform both our overall approach to a customer and the focus of any future Risk Assessment activity. The BRR+ will take place at least annually for customers who are not Low Risk. For Low Risk customers a BRR+ will, in general, be carried out on a three year cycle. The BRR+ process involves the following steps: Considering the landscape in which the business operates, and it’s potential impact on the inherent level of tax compliance risk the customer presents For each applicable tax regime, considering the effect of the customer’s behaviour on this inherent risk - does their relationship with HMRC, their Systems and Processes, Internal Governance and their Approach to Tax Compliance tend to increase or decrease this inherent risk Considering the overall risk rating of the business Agreeing the customer’s overall risk status Agreeing any action required to reduce the level of risk Open Government Licence v3.0 VAT Risk

Find out how VAT works in German including VAT Rates, VAT Rules, VAT Registration, Exemptions and much more. VAT - Norway German-VAT- Guide on how VAT applies in Germany Most goods and services in Germany are taxed at the standard rate of VAT which is 19%. There are two rates of VAT in Germany: Standard Rate 19% Reduced Rate 7% Reduced Rate The reduced rate of VAT (7%) is applicable to goods and services such as: Hotel Accommodation Museums Theatres Exempt Goods and Services Medical Services Insurance Property Sales Charging VAT Customer located in: In German - 19% or 7% B2B customer outside EU - 0% B2B customer in EU - 0% (Reverse Charge Invoice B2C (to private individual) Less than 10,000 Euros - 19% VAT B2C (to private individual) Greater than 10,000 Euros - VAT rate applicable in customers country. German business must either register in customers country or use the One Stop Shop Process. Broadcasting, Telecommunications, Electronically Supplied Services - Place of supply where customer located and as such apply VAT rate in customers country. Input VAT Recovery Input VAT is deducted from output VAT to arrive at the net VAT payable on the VAT return E - Invoicing Guide - German Ministry of Finance E-Invoicing