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International VAT – made simple(ish)

VAT – a lot of the time it is as easy as falling off a log, but once you start to trade overseas it can get difficult and it is worth knowing the basics about how it works.

Confused? The following Infographic, courtesy of Sage, might be useful.

International VAT explained - an infographic from Sage UK
This infographic was produced by Sage Software

Another useful principle, as explained to me by a VAT inspector, is that EC VAT law aims to treat a customer the same wherever they are in the EC.

So, if your customer based in the UK would suffer UK VAT (i.e. a consumer), then the equivalent customer in Nice or Barcelona should suffer UK VAT.

Alternatively, if your customer in the UK would not suffer UK VAT (i.e. a VAT registered business) then the equivalent customer in Munich or Paris would also not have to suffer UK VAT.

Of course it can become a little more complicated so, if in doubt, get advice from your accountant or HMRC.