# Banks charges and VAT



## Tipptop (2 Feb 2009)

Is there Vat charged on bank charges like referral fees and surcharges and just the bank charges. Some one told me there wasn't but I'm just wondering what the logic behind there not being vat charged as the bank is a business and they must charge vat on their services like a referral fees. And more importantly can I claim back VAT on these fees?

  Thanks


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## Graham_07 (2 Feb 2009)

There is no VAT charged on bank charges, referral fees or interest. Just as there is no VAT on rates or insurance.
They ocme under VAT exempt activities. See page 128 of Revenues Guide to Value Added Tax on Revenue website.


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## you_cabbage (9 Feb 2009)

Could some one please help me... Im considering starting a small business procuring goods from the UK and selling them to the Irish Market. While I assume I will have to pay VAT on the goods when I buy them from the UK do I also have to pay vat on the goods when I bring them into Ireland? Also will I have to charge VAT on the goods when I sell them in Ireland as most of my customers will be businesses who are VAT registered and will obviouly be wishing to claim the VAT back as such? I dont think I will reach the threshold of €41,000 in turnover but if I charge VAT I will obviously have to make a vat return


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## Graham_07 (9 Feb 2009)

you_cabbage said:


> Could some one please help me... Im considering starting a small business procuring goods from the UK and selling them to the Irish Market. While I assume I will have to pay VAT on the goods when I buy them from the UK do I also have to pay vat on the goods when I bring them into Ireland? Also will I have to charge VAT on the goods when I sell them in Ireland as most of my customers will be businesses who are VAT registered and will obviouly be wishing to claim the VAT back as such? I dont think I will reach the threshold of €41,000 in turnover but if I charge VAT I will obviously have to make a vat return


 
The VAT threshold for sale of goods is €75,000 from 01/05/08. Unless you expect to exceed that threshold in a 12 month period you are not obliged to register. You may, however register while under the threshold if you consider it advantageous to do so. 

If you are not registered and purchase goods from the UK then you will pay the UK VAT on them. The UK VAT is just part of the overall cost to you. You will then add your mark-up onto that total cost arriving at what will be your sale price. You then sell at that price. Your customers do not get any credit for the VAT as it is irrecoverable. 

If you are VAT registered then you do not pay the UK VAT. The UK supplier gets your Irish VAT number and you purchase the goods net of VAT. You then add your mark-up onto the cost, you then add the Irish VAT rate appropriate to the goods giving you the total selling price. You give your customers VAT invoices which allows them to reclaim the Irish VAT. You are also, when VAT registered entitled to reclaim any other VAT on business expenses, e.g. repairs, advertising, accountancy etc. You pay the net VAT due to Revenue on your VAT return. 

It depends on the customer base, the VAT rates applicable and the expenses as to whether in any case it might be better to register immediately or wait until one exceeds the threshold. It's necessary to sit down and do the sums both ways. 

It is also well worth while to have the ear of a good accountant. Best of luck with it.


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## jasconius (9 Feb 2009)

Also bear in mind that while the exchange rate is relatively good for importers from the UK eg .88, bear in mind that when Chancellor Darling in the UK gets his act and resources together, allow for GBP to strengthen back to somewhere near the .80 levels.
Also calculate that you will not get these rates in the High Street branches as costs are higher and you will be buying relatively small amounts. Allow maybe a 0.02 reduction in the quoted rates you hear on the radio.


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