What is VAT reverse charging and how does it work? That's the theme of episode 44 of I Hate Numbers. With the UK leaving the EU on 1st January 2021 your business needs to know.
In this episode, I'm going to look at VAT reverse charging and
- An overview of what it is
- How it applies to Goods
- The treatment of Services
- When your business is selling
- What happens when you are the buyer?
- Compliance and following the law
What is VAT reverse charging?
We know it's here to stay, and if anything, it is becoming more widely used. Governments like it because it reduces the level of VAT fraud and evasion. Where your business applies reverse charging, the responsibility shifts to your customer.
It’s like making a reverse charge (collect) phone call. The bill payer picks up the tab.
Your business still has a part to play, verification, evidence and compliance don’t vanish. With VAT reverse charging it is your customer who is responsible for paying VAT in the country they belong and will be easier to chase than an overseas supplier.
VAT reverse charging only applies to services that would be zero-rated, reduced rated or standard rated. Where your business is a buyer, then you can be within VAT reverse charging, even if you are not VAT registered.
Listen to find out more about What is VAT reverse charging and how does it work?
What software and technology solutions exist for VAT compliance?
There are many software and technology-based solutions being developed. One example is Quaderno, which can handle those responsibilities behind the scenes. Their service is full tax compliance and deals with the reverse-charge mechanism.
Where your business sells e-books, online training, digital products then you also need to be aware of not breaking EU VAT law from 1st January 2021. This applies whether you only sell one item, and you are not VAT registered. Check out our Live Recorded Webinar to find out more
In this episode
- Understanding what VAT Reverse Charging is
- Appreciating how it applies to goods and services
- What happens when your business is the buyer and seller
- The role of software and system solutions
- Developing your own Numbers confidence and decisions
- Take more control of your numbers to help make you money, survive and thrive