third post of the morning. My client is VAT registered but pays for stuff in Europe including the VAT of the country eg hotel bills. Should I be posting this as zero rated in the UK or Outside the Scope of VAT? HMRC have said if he's paid EU VAT they aren't interested in it as VAT has been paid somewhere so doesn't need to be paid again in the UK. I'm thinking it should be in the VAT return as it is spend but it's not strictly zero rated as such is it?
These type of expenses (incurred in another EU country, with receipts showing the VAT of that country) are outside the scope of UK VAT and so should be excluded from the VAT return. Subject to the input VAT rules of the country in question, it might be possible for your client to reclaim the EU VAT - see here for more details.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
