Managing UK VAT with individuals and organisations worldwide

Hi Paul,

Thank you for your interest in our plugins.

In the Premium version of this plugin (https://www.simbahosting.co.uk/s3/product/woocommerce-eu-vat-compliance/) you can set up the plugin to allow business customers who have a valid EU VAT number to be exempted from any VAT that would otherwise have been charged in your WooCommerce tax tables, and you can also turn on a setting that will mean that UK customers are never exempted (assuming that the UK is your store’s base country in your WooCommerce settings, then there is a setting to ensure that base country customers are never exempted).

David

Thank you David,
Understood about the base country – no one exempt
Understood about EU organisations if they provide a valid EU Vat number
I think there is a third / fourth implication – please excuse me if I have missed this…
In addition we sell to individuals and organisations outside of UK & EU.
My understanding is that for organisations in RoW (rest of world) we would not charge VAT but for individuals anywhere in the world we must charge VAT
Look forward to your thoughts,
Thank you
Paul

• This reply was modified 1 year, 10 months ago by paul724.

Hi Paul,

Which VAT regime is that? “If you sell, send or transfer goods out of the UK you do not normally need to charge VAT on them.” – https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad

David

Hi David,
I think this is the UK government policy that we are thinking of:

https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec6

6.2?B2C?supplies

“The general rule for?B2C?supplies of services is that the place of supply is where the supplier belongs, irrespective of the location of their customer.”

It is complicated but as we are based in the UK and supply services to individuals B2C (outside of UK) this what we thought applied.
Thank you
Paul

Hi Paul,

Thank you – I understand.

The complication with business customers outside of the UK/EU/Norway is how you would, in an automated manner, establish that the customer is a business? For customers inside those three VAT zones, the plugin can accept and validate a VAT number against the official government databases. But for those outside, you’d have to manually receive and examine whatever credentials they’re going to send to you in order to treat it as a B2B transaction.

We added “Norway” on specific request from a Norwegian user of our plugin, who pointed us to their government’s VAT number validation service. I’m very open to doing that with further territories, as it’s usually not too painful if there is an official service.

David

Hi David,
Thank you – at the last time of checking we have clients in 36 countries (including EU but not the UK). It sounds a lot but the numbers are small with direct relationships with each one. We are looking now at on-line sales without that direct relationship – hence the interest in your plugin and WooCommerce.
I think the new type of customers will be individuals (charged VAT under section 6) and organisations (do not charge VAT if they are validated)
Not quite sure yet how much of a mountain this is to climb and will be interested in your thoughts
Thank you
Paul

Well, I think the key question is how you’re going to differentiate between consumers and businesses, i.e. how the businesses will be validated. Will they upload a document of registration or something like that? I don’t see, given the lack of existence of a world-wide “validate business” automated service (as far as I know), how you will avoid some manual part to your sales process. The gov.uk link above says “If your customer is unable to provide a VAT number you can accept alternative evidence. This includes certificates from fiscal authorities or other commercial documents indicating the nature of the customer’s activities in their home country. Such evidence should be kept as part of your records.”