Uk Web Sites screwing the Irish Vat System
I’ve noticed lately that many UK sites that are clearly doing over the £35,000 threshold in B2C sales to Ireland, still aren’t charging their customers Irish VAT. With the country in such a mess financially at the moment surely this kind of low hanging fruit is something revenue should be focusing in on. Eventually i would guess revenue will catch on and then they will back charge the companies for the VAT they should have been charging.
So to my fellow E-Entrepreneurs if your delivering into Ireland and make over the threshold in sales, get registered to save yourself some unexpected audits and penalties.
Rafiq said
am January 16 2010 @ 4:05 am
I don’t think so. The only people who have to pay Irish VAT are Irish companies – those with a registered business in Ireland. It doesn’t matter how many sales they make TO Ireland, they don’t have to pay anything to the Irish revenue if they’re not an Irish company.
They do have to charge VAT, but its UK VAT and its payable to the UK government.
But hey, check with an accountant.
Ronan said
am January 17 2010 @ 6:48 pm
I think some accountants might not be familiar with these laws, hence why tax specialists or large accounting firms are great. But not every entrepreneur can spend or justify that sort of money on help so like me be they can be really geeky and read up on the tax laws.
Ofcourse a lot of companies sell B2B so Intrastat applies and therefore this doesn’t count toward the threshold.
Still several companies that are selling massive multiples of the threshold and frankly i’d love it if revenue pulled them in.
Here’s some background on the rules.
http://www.revenue.ie/en/tax/vat/leaflets/distance-sales-eu.html
“[paragraph (A) of the proviso to section 3(6)(d) of the VAT Act 1972 refers]. The €35,000 limit is fixed in Irish VAT law and does not vary with fluctuations in the ECU exchange rate [paragraph (A) of the proviso to section 3(6)(d) of the VAT Act 1972 refers] Suppliers from other Member States whose turnover from distance sales into Ireland exceeds that limit must register for VAT here and account for VAT or all distance sales in to the State.”
http://www.revenue.ie/en/about/foi/s16/vat/chpt-03/3-19.pdf – Pop up pdf download.
Rafiq said
am January 18 2010 @ 7:29 am
Interesting! I’ll look into it more.