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An importer of jewellery products from Italy registered for VAT to enable her to obtain the goods free of Italian VAT. However, she did not realise she should be charging VAT on her sales to customers. Arrears of £6,000 have arisen
I have taken on a new client who buys jewellery from an Italian supplier and sells it in the UK at parties and on the internet with annual sales of about £40 000 below the compulsory registration limit.
Her Italian supplier said that if she obtained a UK VAT number he would charge her 20% less on her purchases. This is correct because he would then in effect zero-rate his sales and not be liable to VAT in Italy.
My client applied for a VAT number from HMRC and now buys VAT-free jewellery from Italy.
However she did not realise that she must account for output tax on her sales so each time she got a central assessment from HMRC in the absence of a VAT return she went online and completed a “nil” return. She thought the purpose of a VAT...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
