No VAT on ferries to France?

Actually you’re meant to charge yourself the VAT by putting it in box 2 on your VAT return. You’re then meant to reclaim it by adding it to your box 4 figure. Under normal circumstances this will mean that your VAT liability is unchanged.

BUT… if you’re on the Flat Rate Scheme you can’t recover this VAT – your £85 fare increases your VAT liability by £14.88.

 

Posted under VAT

Posted by Alec at 6:52 am, October 2, 2006

2 Comments so far

  1. Alec added on  October 2nd, 2006 at 10:28

    If you’re VAT registered and you invoice someone who’s VAT registered in another EU country you’re meant to obtain their VAT number and invoice them without charging VAT. They then self-assess the VAT at their own country’s rate and put in a balancing claim for repayment.

    Under most circumstances this is a pointless waste of time – since the VAT and the reclaim balance each other out. If you’re on the FRS though you can’t reclaim the VAT, so you end up having to pay extra.

    Best to let your customers pay for the ferry for you.

  2. Alec added on  October 2nd, 2006 at 12:18

    It gives me a headache every time I even think about cross-border VAT. It’s a nasty can of worms and the more you dig into it, the more you realise how much you’re doing wrong and how impossible it would be to do it right.

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