UK business owners. Are you VAT registered? - Part 2

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I've moved all of my blogging activity to The Lucid Blog.
You can visit my new home at:
www.thelucidblog.com

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Following on from my post in February:

http://www.thenettle.com/blog/2005/02/uk-business-owners-are-you-vat.html

We have a definite answer from the VAT man (lady) now and here is how we understand it. Please bear in mind that this is our interpretation of what we have been advised and that you should always seek professional advice from an accountant or from HM Customs & Excise (HMCE).

When we receive a new, paying subscriber to The Nettle Magazine we have to establish the country where the persons business is based. Not where the person lives or where they were born, but where their business is based.

If the business is based in an EU country, we have to ask if they are VAT registered. If they are, we must take their VAT number.

EU countries are:

Austria
Belgium
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Slovenia
Slovak Republic
Spain
Sweden
United Kingdom

Once we know what country the business is based in, whether it is in the EU, whether it is VAT registered and, if so, what the VAT registration number, that then allows us to:

1. tell EU businesses other than in the UK that they must account for VAT themselves, if relevant

2. send an "EC Sales List" to HMCE every three months, listing the VAT registration number of all of our EU (other than UK) subscribers and giving the amount they have paid to us in the quarter

3. treat all of the payments received from UK subscribers as if they included VAT and pay over the VAT each quarter.

We were pleased to find that there are no VAT implications (at least for us) on the commisions we pay out. Any business in the EU receiving commissions has to handle any VAT issues themselves.

Simple, eh?