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VAT on Imports When Trading with EU Countries

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › VAT on Imports When Trading with EU Countries

  • This topic has 2 replies, 2 voices, and was last updated 3 years ago by Anonymous.
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  • August 14, 2021 at 11:56 pm #631596
    Anonymous
    Inactive
    • Topics: 2
    • Replies: 1
    • ☆

    Hi there, I’m a bit confused about the output and input VAT that will be inserted into the VAT return when a good is imported from an EU business, and is subsequently sold to a customer.

    As I understand from the notes, the overseas business will import the goods zero-rated, and so the UK business reverses the charge and ‘self-supplies’ this VAT as an output on their return.

    Further, unless the good concerned is exempt, then input VAT will also be reclaimable for the UK business, which balances the output VAT to produce a net sum of £0.

    But what happens if the good then goes on to be sold to a consumer?

    As input VAT will have already been reclaimed, do we simply charge output VAT on the good to the consumer, with the net effect on the VAT return being the net sum of £0 + whatever output VAT is charged to the consumer?

    Thanks.

    August 16, 2021 at 12:47 pm #631734
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    Correct – if the sale to the consumer is standard rated then the trader simply charges output VAT as normal on the sale

    August 19, 2021 at 12:00 am #631997
    Anonymous
    Inactive
    • Topics: 2
    • Replies: 1
    • ☆

    Thank you!

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