Accounting for transactions with countries outside the VAT zone...

Is there a list available somewhere that shows you which countries do and do not pay UK VAT?

It is always confusing having to ask those in other countries and I'm not always entirely sure if they give you the correct answer or not when you ask them just so that they can avoid the tax!

Also how do you account for the VAT in terms of being on different vat schemes such as flat rate - my understanding is that you basically lose money on these sorts of transactions because you have to pay vat on it anyway as part of your turnover but of course aren't charging the client for vat...

Re : Accounting for transactions with countries outside the VAT zone

VAT chargeable to companies outside the UK is dependent on whether the supply is one of goods or of services.

If you supply and deliver goods to a company in the EU (and outside the UK) then if you can obtain the other companies VAT Registration number then no VAT is charged. The VAT number of the customer must be shown on the sales invoice. If you cannot obtain the other companies VAT registration number or they pick up the goods themselves then you must charge VAT as normal.

If you supply services to a customer in the EU then VAT is charged dependent on whether the supply is made to another business or to a customer.

B2B Supplies
For place of supply of services purposes eB2B suppliesf means supplies to businesses whose activities are wholly of a business nature. It also includes supplies to entities which have both business and non-business activities such as charities and government departments.

Generally, The B2B rule for supplies of services is that the supply is made where the customer belongs. So far, example if you provide services to an Italian company, you would charge Italian VAT.

B2C Supplies

For place of supply of services purposes eB2C suppliesf means supplies to:

Ħa private individual
Ħa charity, government department or other body which has no business activities, or
Ħa epersonf who receives a supply of services wholly for private purposes.

The B2C general rule for supplies of services is that the supply is made where the supplier belong.
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Re : Accounting for transactions with countries outside the VAT zone

With regards to the flat rate scheme, you would charge VAT to the customer as per normal (i.e. 17.5% on top of the sales price). When you calculate VAT under the flat rate scheme, you would then multiply the requisite percentage for the flat rate scheme, dependent on the industry, on the GROSS (i.e. sales price plus VAT) Income.

You may find that your VAT liability is lower when using the flat rate scheme.
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Re : Accounting for transactions with countries outside the VAT zone

Excellent posts, I found them interesting and I'm sure the small businesses here will find that very useful