Vat On Installation Of Organs From Abroad

[Malcolm Kemp]

Barry Williams has suggested that this message below, penned by Himself, may be of interest to Board members. I'm only the messenger but most of you will be aware that he is as expert as anyone in these matters.

 

Malcolm

 

Installation and Supply of Organs from Abroad

The rules for ‘installed goods’ are established law and are as follows.

 

For Value Added Tax purposes the ‘place of supply’ of installed goods is the place where they are physically installed. This means the goods installed in the United Kingdom are liable to Value Added Tax in the United Kingdom in the normal way.

 

Suppliers of installed goods who are registered for VAT in the UK are required to account for VAT on their supply here, whether or not the customer is VAT registered.

 

Un-registered UK suppliers, or suppliers from countries outside the UK, will not be required to account for UK VAT unless the value of their supplies in a year exceeds the UK VAT threshold for registration. Once they exceed the registration threshold they will need to register for VAT here and account for the tax due in the usual way.

 

Suppliers who import goods from outside the European Community which are to be installed in the United Kingdom are required to pay Import VAT and Duty on those goods. No Import VAT or Duty is payable on goods moved to the United Kingdom from other European Union countries.

 

All of this is very dependent upon the UK VAT threshold. The result is that for installed goods only, if the European Union supplier makes supplies under the VAT threshold in the UK, he or she does not have to account for VAT at all, unless or until their total UK sales in that year exceed the VAT registration threshold. This is on a par with any UK supplier. For supply only, he would have to account for his own (i.e. non-UK) VAT for the sale of goods alone wherever they were sold. The same rules apply to a UK supplier installing goods elsewhere in the European Union. It follows that there could be an advantage to using a European Union organ builder to supply and install the organ, although the threshold rules would deter the EU Company from wanting to make too many supplies here in any one year.

 

Similar threshold rules apply to the installation of non-EU organs, but in these cases VAT and Import Duty are charged on the goods at the time of importation.

 

The threshold rules do not, in the case of ‘installed goods’, work to the United Kingdom suppliers’ advantage. The threshold is deliberately kept high to help smaller businesses. This is a benefit not available in the rest of the European Union, where VAT thresholds are generally much lower.

 

 

 

 

 

 

 

[Jonathan Lane]

I'm probably wrong, and I bow to Barry's knowledge on such matters, but my understanding about thresholds was they were worked out on turnover not sales. If however, I am wrong, I would be delighted to know!

 

Jonathan

[Malcolm Kemp]

Barry's reply to Jonathan's question herewith:

 

The thresholds are set by Parliament. Turnover is usually the same as sales. VAT is charged on a supply, which may not be the same as turnover. Supplies are slightly wider than sales by contract. Complicated! Yours as ever, Barry

[Jonathan Lane]

Barry's reply to Jonathan's question herewith:

 

The thresholds are set by Parliament. Turnover is usually the same as sales. VAT is charged on a supply, which may not be the same as turnover. Supplies are slightly wider than sales by contract. Complicated! Yours as ever, Barry

Thanks Barry & Malcolm. I still think VAT is hard!

 

Jonathan