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Level 1

VAT Reverse Charge UK

We are new start business who has been trading since October 2020 (VAT registered). We are a house plant shop who purchases our plants from Holland. Our supplier who is a Dutch based company have invoiced us without VAT, stating on the invoice " When providing services: VAT reverse charge"


First question is my understanding that the VAT reverse charge works as follows: We purchase the goods (plants) from our supplier without VAT and sell our plants to our customers without VAT. In terms of accounting for, all invoices are uploaded on Quickbooks choosing the VAT ECG- this will ensure that our purchase (input) and sale (output) VAT will be declared correctly on the VAT return- basically cancelling each other our so no payment needed.


Next question, our supplier due to Brexit has decided to start invoicing via a UK company. This is because of a number of factors but mainly because of paperwork and the plant passport (yes plants have passports !). This will obviously change the VAT element. We have been approached by another supplier who can continue to trade using there Dutch company and invoice us using the reversal charge, I would like to know opinions and the advantages and disadvantages of UK Vs Dutch suppliers in terms of the reversal charge, accounting and customer benefits