Really Quick VAT Q?

[ButtermilkJa]

I think I know this already but just need a quick clarification...

I've just sent an invoice to a client which included 21% VAT (as I am VAT registered). However, she just emailed me to say she is not VAT registered and is there "any way around it?".

I presume there is nothing legal that I can do to remove the VAT burden on her? As she is last in the supply chain she must absorb the VAT, correct?

Thanks in advance!!

 

[bazermc]

However, she just emailed me to say she is not VAT registered and is there "any way around it?".

I presume there is nothing legal that I can do to remove the VAT burden on her? As she is last in the supply chain she must absorb the VAT, correct?

I love the Irish mentallity of "anyway around it"

I am afraid there is no way around it legally you need to charge her VAT, that is the point of the indirect system of VAT. You have a liability to remit the VAT charged and if if you fail to do so it will be your neck on the line not hers.

 

[ButtermilkJa]

I love the Irish mentallity of "anyway around it"...

I know , and it's only about €250 VAT in total which is funny.

...I am afraid there is no way around it legally you need to charge her VAT, that is the point of the indirect system of VAT. You have a liability to remit the VAT charged and if if you fail to do so it will be your neck on the line not hers.

That's what I was thinking. If she wants me to not charge her VAT then it will come back to bite me in the end, while nothing will happen to her.

 

[ClubMan]

If she wants me to not charge her VAT then it will come back to bite me in the end, while nothing will happen to her.

If you don't charge her VAT then presumably you will be in breach of the relevant tax laws. Doing this would seem to be a really bad idea. Ask your accountant.

 

[ButtermilkJa]

If you don't charge her VAT then presumably you will be in breach of the relevant tax laws. Doing this would seem to be a really bad idea. Ask your accountant.

Agreed. I don't think I even need to ask my accountant to be honest. I'm just going to have to tell her that it's not an option.

 

[aetius]

You could lose her as a repeat customer - alternatively if the VAT was €250, this means that the net was c€1,190.

You could give her a once-off discount, if you know she'll ba back as a customer, and charge her c€983 net plus 21% VAT @ c€206 = € 1,190 Gross.

Sure, you'll be taking a hit here but you may not lose the customer.

 

[ButtermilkJa]

That's not a bad idea!

However, they then asked could they send in one last tiny amend and could I include it in the invoice I already sent. I said yes, just to keep things sweet, and they end up sending in a few hours of amends.

I know I'm to blame here but how cheeky is that!!

 

[Kluivert]

Give issue her a credit note, and include it in your vat return together with the original invoice you gave her and the net effect is the gross amount of 1190.