AM Online

Sales to business in other countries – VAT warning

Always take steps to ensure that businesses you deal with are VAT registered in their own respective countries or risk getting your fingers burned. (Dennison Commercials Limited V20334).

A company selling commercial vehicles from Northern Ireland, sold lorries to a customer in the Republic of Ireland.

Transactions had been carried out over a number of years between the two companies and the client's Republic of Ireland VAT registration number had been used by the seller to meet one of the conditions for zero-rating.

At the customer's request, the vehicles were all pre registered in Northern Ireland in advance of the dates on the sales invoices and the customer then subsequently collected them.

Unfortunately, as is so often the case, the company that sold the vehicles had failed to check the validity of the ROI VAT number and it was concluded by HMRC that they were not entitled to zero rate the sales as the VAT number used by the customer was actually invalid.

Because of a failure to check the validity of a VAT registration number, the company ended up with an assessment of £34,627 - a very expensive lesson!

The following website can be used to confirm validation of VAT registration numbers; - it may be a good idea for clients to put it into their "favourites".

Visit or call 0870 26 77 118 for more information.

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