My new client who runs a holiday lets business uses the agency Home Away. They are a UK business, but their online payment part of the business is based in Ireland. They take payments and bookings from the customers and then forward the money to my client minus their fee. On the fee invoice from them, there is a total fee payable with no mention of VAT, but they have an Irish VAT number on the bottom of the invoice. My client says that they did have to tell them their VAT number in the beginning.
I've spoken to the company in Ireland and they have no idea what I'm talking about when I've questioned the VAT part of the invoice as they say that there isn't any charged. Their FAQs say 'you're responsible in your country' for paying/reclaiming any VAT.
Is there anyone who can tell me if these are treated as EU purchases with a 20% ECS code used (in Quickbooks) or if they are VAT inclusive in the UK? My client up until now has been treating them as VAT inclusive at 20% and I'm not sure that that's right. Equally, I'm not sure that the they can count as EU purchases as there's no reference to my clients VAT number.
Any help would be much appreciated as I've asked quite a few people about this and no one can help!
Hi LJ
I would go back to them and ask what exactly they have done with that VAT number - why they are not showing your clients VAT number and 'reverse charge' on their invoices to your client. I understand that is what they should do (but stand to be corrected! Not got my head in VAT mode at all today!!). Then follow regs in here www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you 'Cheshire' that's what I thought - but they seem to think they don't need to.
One thing I'm a bit unclear on that you might be able to help me with is - is the difference between reverse charge and the standard 20% ECS that I use in QBO. I usually, for acquisitions, use the 20% ECS which adds it to sales, and then takes it out of purchases - net effect is zero, but there is a reverse charge option as well. Do you know when is best to use which one?
Hi
just had a very quick look at their site and they indicate that you should account for VAt under the reverse charge mechanism BUT they also on another section mention 'as an electronic service provider' which to me hints at MOSS. You need to check with a VAT specialist before doing anything further, assuming you dont want to spend a few hours wading through the treacle on HMRC. There is one on the site - Les Howard. Suggest you give it a while to see if he responds.
Cant advise on how to process through quick books, even if we had the answer yet, which we dont, as Im not a user of the software. Once you have heard from Les I would suggest doing a backup, trying out a method, doing a dummy run of the VAT return and seeing if it pops up where it should. If not - restore your back up and try the other method. Unless someone else on here helps on that score - Amanda is our go to girl for Quick Books.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thanks so much for your help! I must have been looking at a different part of their site.
I'll hold on for the VAT expert and have a bit more of a google. There really is no one answer fits all is there!
(This can get complex!)
The Place of Supply rules mean that any supplies of accommodation are deemed to take place where the accommodation is located. Unless the Irish company is registered in the UK, it would seem that they are simply acting as an Agent. But whether they are agent for the accomodation, or only handling payment is a fine point. And then is their supply an exempt financial transaction, or something else?
I don't think it is MOSS, as it is a B2B supply.
I am happy to look at documentation if that would be helpful.
