Vat question..

[Gaz]

Situation, wonder if a way around.

company A wants to buy product from company B, but wants company C to handle
the order and payment.

Company C will not be taking a mark up but acting as a purchaser for A. The
Invoice from company B will be handed over to company A, but Company B will
be paid by C, and A will pay B.

A & B are both VAT registered, C is not.

Can A reclaim Vat paid to B by C?

Gaz

 

[DoobieDo]

Situation, wonder if a way around.

company A wants to buy product from company B, but wants company C to handle
the order and payment.

Company C will not be taking a mark up but acting as a purchaser for A. The
Invoice from company B will be handed over to company A, but Company B will
be paid by C, and A will pay B.

A & B are both VAT registered, C is not.

Can A reclaim Vat paid to B by C?

Gaz

and all of them are in the UK ?

 

[Peter Saxton]

Situation, wonder if a way around.

company A wants to buy product from company B, but wants company C to handle
the order and payment.

Company C will not be taking a mark up but acting as a purchaser for A. The
Invoice from company B will be handed over to company A, but Company B will
be paid by C, and A will pay B.

A & B are both VAT registered, C is not.

Can A reclaim Vat paid to B by C?

Gaz

Can't you make it more complicated?

You don't like the old fashioned method of obtaining goods in return
for money?

 

[Dave A]

Situation, wonder if a way around.

company A wants to buy product from company B, but wants company C to handle
the order and payment.

Company C will not be taking a mark up but acting as a purchaser for A. The
Invoice from company B will be handed over to company A, but Company B will
be paid by C, and A will pay B.

I can't make sense of this - did you mean "and A will pay C"?

 

[Gaz]

and all of them are in the UK ?

Erm, I think so, it is a purchase from dell.co.uk

Gaz

 

[Gaz]

Can't you make it more complicated?

I thought it was quite simple, I am been asked to act as a middleman, but I
am not vat registered.

 

[Gaz]

I can't make sense of this - did you mean "and A will pay C"?

A wants to obtain goods from C, but wants B to purchase it. A wants to pay
B, and B to get it on behalf of C.

Gaz

 

[Gaz]

I can't make sense of this - did you mean "and A will pay C"?

Scrub that, sorry: yes i mean A will pay C.

Sorry about the confusion... I am not Vat registered and dont usually handle
these kind of situations.

Gaz

 

[Peter Saxton]

I thought it was quite simple, I am been asked to act as a middleman, but I
am not vat registered.

What is the purpose?

 

[Peter Saxton]

A wants to obtain goods from C, but wants B to purchase it. A wants to pay
B, and B to get it on behalf of C.

Gaz

Can you explain the difference between the following:

Obtain
purchase
pay
get it

 

[Ronald Raygun]

You mean A will reimburse C.

Erm, I think so, it is a purchase from dell.co.uk

Whose name will B put on the invoice?
I'd have thought that if A's, then yes, but if C's, then no.

I have to ask. Why all this kafuffle?

Let me guess: C is an employee of A, sorry, a consultant in a
company wrapper, working for A. C wants to use a computer for
this work, which A is happy to pay for, but doesn't want to get
involved in the nitty gritty of choosing and buying. Am I close?

 

[Gaz]

You mean A will reimburse C.


Whose name will B put on the invoice?
I'd have thought that if A's, then yes, but if C's, then no.

I have to ask. Why all this kafuffle?

Let me guess: C is an employee of A, sorry, a consultant in a
company wrapper, working for A. C wants to use a computer for
this work, which A is happy to pay for, but doesn't want to get
involved in the nitty gritty of choosing and buying. Am I close?

Actually no, no prior relationship exists between any of the parties, other
then in this situation Company A, who has no prior relationship with C in
any way, asked C to recommend and obtain some IT equipment. A has little
knowledge of IT and wants all the purchasing to be handled by C, and then to
be billed by C. C recommended B as a good and economical source.

Gaz

 

[Nogood Boyo]

Situation, wonder if a way around.

company A wants to buy product from company B, but wants company C to handle
the order and payment.

Company C will not be taking a mark up but acting as a purchaser for A. The
Invoice from company B will be handed over to company A, but Company B will
be paid by C, and A will pay B.

A & B are both VAT registered, C is not.

Can A reclaim Vat paid to B by C?

Never mind the "handing over" of the invoice. Whose names will appear
on it?

ww2.hmce.gov.uk/forms/notices/700-a5-02.htm#P2345_173919

Notice 700 The VAT Guide

22. Supplies made by or through agents: general rules

 

[Ronald Raygun]

Actually no, no prior relationship exists between any of the parties,
other then in this situation Company A, who has no prior relationship with
C in any way, asked C to recommend and obtain some IT equipment. A has
little knowledge of IT and wants all the purchasing to be handled by C,
and then to be billed by C. C recommended B as a good and economical
source.

I think the crux is that C must not bill A. Bill=Invoice. To claim
VAT back, A must be invoiced by a VAT-registered supplier (i.e. B),
even if this invoice, like the goods and the payment, physically goes
via C.

If B cannot be persuaded to put A's name on the invoice they send C,
it *just might* be sufficient for C to add the words "as agent for A"
below his own on the invoice before passing it on.

 

[Gaz]

I think the crux is that C must not bill A. Bill=Invoice. To claim
VAT back, A must be invoiced by a VAT-registered supplier (i.e. B),
even if this invoice, like the goods and the payment, physically goes
via C.

If B cannot be persuaded to put A's name on the invoice they send C,
it *just might* be sufficient for C to add the words "as agent for A"
below his own on the invoice before passing it on.
Thanks.

They certainly are. Have you checked out some of their low end prices?

Gaz

 

[Nogood Boyo]

I think the crux is that C must not bill A. Bill=Invoice. To claim
VAT back, A must be invoiced by a VAT-registered supplier (i.e. B),
even if this invoice, like the goods and the payment, physically goes
via C.

If B cannot be persuaded to put A's name on the invoice they send C,
it *just might* be sufficient for C to add the words "as agent for A"
below his own on the invoice before passing it on.

Do you have any basis for that or did you just make it up..?

 

[Ronald Raygun]

Do you have any basis for that or did you just make it up..?

Unfortunately, the reference you posted a wee while ago, and which
purports to deal with supplies through agents, is not particularly
helpful as concerns the specific case of an unregistered agent, the
examples seem all to assume the agent is registered but a principal
might not be.

The general point is made, though, that an agent (so long as it is
clear he is an agent) is not treated as a link in the supply chain
between the principals. Accordingly, where both principals are
registered, the purchaser can reclaim the VAT charged by the supplier,
because the unregistered agent does not break the chain as he would
were he buying and re-selling the goods as a trader.

The point is made in 22.2 that the question of whether you are
acting as agent must be clearly established between agent and
principal but could be in the form of a mere oral agreement or
even just inferred. My suggested annotating of the invoice was
not intended to create a change of fact, from C being the principal
to A being the principal, but to provide a bit of documentation,
in the absence of any other, to support the position that A was
always intended to be the principal, and C the agent, despite
the fact that C's name might accidentally appear on the invoice
instead of A's.

 

[Ronald Raygun]

They certainly are. Have you checked out some of their low end prices?

I've been getting glossy fliers through the letterbox for ages and
they seemed to concentrate on the pricier ones, so I've tended to
associate Dell with expensive. But now you mention it, a quick look
has left me surprisingly impressed.

 

[Peter Saxton]

Actually no, no prior relationship exists between any of the parties, other
then in this situation Company A, who has no prior relationship with C in
any way, asked C to recommend and obtain some IT equipment. A has little
knowledge of IT and wants all the purchasing to be handled by C, and then to
be billed by C. C recommended B as a good and economical source.

Gaz

It's a ridiculous way to handle it. Why not have the IT literate
person handle the discussions and prepare the order in the name of the
non-IT literate person or the computer seller take instructions from
the IT literate person but sends the confirmation to the non-IT person
and deal with it that way?

 

[Ronald Raygun]

It's a ridiculous way to handle it. Why not have the IT literate
person handle the discussions and prepare the order in the name of the
non-IT literate person or the computer seller take instructions from
the IT literate person but sends the confirmation to the non-IT person
and deal with it that way?

I suspect it's because C is so IT-literate that he's also
non-IT-illiterate, and the only way he can think of for the
stuff to be ordered is online by using his credit card, and
has probably already done so, and is now feverishly looking
for a way to avoid the embarrassment of possibly losing A
the opportunity to recover VAT.

Perhaps B can be persuaded to cancel the invoice to C by issuing
a credit note, and then to re-invoice A instead. But I'll bet there's
no way this can be done online, and it'll involve actually speaking
to Miss Jones in the Remedial Accounts Department.