What is VAT?
VAT is the abbreviation of Value Added Tax. VAT is in general due when goods and/or services are sold. It applies to most goods and services that are bought and sold for use or consumption in the United Kingdom. It is a consumption tax because it is ultimately borne by the final consumer.
Who must pay VAT?
Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.
If you are a business customer, you should provide your VAT Identification Number to Zoom. If the VAT number is valid then no VAT will be charged on the supplies made to you by Zoom. If you do not have a VAT number, then UK VAT will be charged on the supplies made to you by Zoom.
Will Zoom charge UK VAT on its supplies?
Effective from 1 January 2021 Zoom will be registered for VAT in the UK.
Zoom is established outside the UK. If Zoom makes a supply to a business customer (B2B supply) Zoom will not charge UK VAT on the supply. However, the business customer may be required to self-account for VAT under the reverse charge mechanism. A customer will be treated as a business customer if they provide a valid VAT number.
If Zoom makes a supply to a non-business customer (B2C supply) Zoom will charge UK VAT on its supply. A customer will be treated as a non-business customer where it does not provide a valid UK VAT number.
The Isle of Man is treated as part of the territory of the UK for indirect tax purposes. On the basis that Zoom is registered for VAT in the UK, Zoom is required to collect and remit tax in the Isle of Man via Zoom’s UK VAT registration. Therefore, the term UK in this FAQ should be taken to include the Isle of Man.
What is a VAT ID number?
A VAT identification number, or VAT registration number, is a unique number that identifies that a business is registered for VAT. Zoom will not charge UK VAT to customers that have a valid UK VAT number.
A VAT number in the UK is a nine-digit number. Zoom will validate customer VAT numbers to confirm they are valid. Zoom reserves the right to request payment of VAT for any invoices issued by Zoom without VAT where an invalid VAT number is provided by the customer to Zoom.
Does Zoom have a UK VAT ID number?
Historically, Zoom reported VAT on supplies to non-business customers (B2C supplies) in the UK via an EU simplification known as the Mini One Stop Shop (MOSS). This simplification meant that Zoom did not have a direct VAT registration in the UK.
Effective from 1 January 2021, it is not possible for Zoom to use the MOSS return to report VAT on B2C supplies.
As such, Zoom has requested a UK VAT number from HM Revenue & Customs (HMRC) and the VAT number will be effective from 1 January 2021. The UK VAT collected on B2C supplies will be paid by Zoom to HMRC.
What exemptions are available and how does a customer notify Zoom?
Customers who provide a valid UK VAT number will not be charged VAT by Zoom. Customers that provide a valid UK VAT number may be required to self-account for VAT via the reverse charge mechanism in the UK.
How do I enter my VAT ID?
To enter the VAT ID number, please follow these steps:
- Sign into the Zoom portal.
- Under Account Management, choose the Billing page.
- Under Billing Contact, choose to edit the VAT Number (which appears after the Billing Contact Address field).
- Enter your VAT ID number and click Save.
What happens if I do not have a VAT ID?
If a customer is unable to provide a valid UK VAT number Zoom will charge and collect UK VAT on its supplies.
How is Zoom determining which customers UK VAT applies to?
If you have not provided a valid UK VAT number, Zoom will apply UK VAT where the ‘Sold to’ location is the UK. This information is subject to cross-referencing against other data to verify that the ‘Sold to’ country is accurate.
Why does my VAT number appear under Billing Contact if the application of VAT is based on Sold To location?
Usually, the ‘Billing Contact’ location and ‘Sold To’ location are the same. Customers are first asked to enter a ‘Billing Contact’ location, which serves as the ‘Sold To’ location (unless the ‘Sold To’ address is specifically included as a different location when customers onboard). A UK VAT number is requested if this ‘Sold To’ location is in the UK.
If the ‘Billing Contact’ and ‘Sold To’ contact are in different locations, the VAT charged will be based on the ‘Sold To’ location. Please note that the ‘Sold To’ location is subject to cross-referencing against other information to confirm it is accurate.
Is there a minimum purchase threshold before VAT is applied?
No, VAT applies to all sales of Zoom’s services where a valid UK VAT number is not provided by the customer.
Is there a form that a charity can submit showing that it is tax exempt, rather than entering a VAT ID number?
Charities that do not have any form of business operations, in most cases, will not be registered for VAT. Because charities usually do not carry out economic activities (i.e., sales of goods/services for consideration), they are mostly not in the possession of a VAT number. As such, charities may still incur VAT on the supplies they purchase from Zoom.
If a charity provides a valid UK VAT number, then no VAT will be charged by Zoom on its supplies.
Are there any other exemptions that apply in the UK?
There are specific exemptions that can apply where supplies are made to NATO or other similar organizations based in the UK. These exemptions are uncommon. If you consider that this exemption may apply to you please provide details and evidence of this exemption to Zoom by chatting with Billing.
Are there any VAT obligations for me as a customer?
If you have provided a valid UK VAT number no VAT will be charged to you. However, you may have a requirement to report the purchase of services through your VAT return via the reverse charge mechanism.
What if I have a VAT ID and forget to enter it?
The VAT number can be entered at any time. If entered before the next invoice, Zoom will not charge VAT on the next invoice or future invoices issued to you. If no VAT number is entered at the time the next invoice is issued, VAT will be charged until a valid UK VAT number is entered.
If a valid UK VAT number is entered and VAT has previously been charged on the invoices issued to you, then upon request by you, Zoom may refund for any VAT included on invoices issued in the thirty days prior to a valid VAT number being provided. However, VAT will not be refunded on any invoices issued outside of this thirty-day period.
If I have entered my VAT number will Zoom issue me an invoice?
Yes, Zoom will issue an invoice for all supplies made to business customers.
On the invoice you receive from Zoom if you have entered your UK VAT number in your Zoom account your invoice will show your VAT number, business name as well as other details specific to the supplies Zoom makes to you.
If I do not have a VAT number will I get an invoice?
If you do not provide a VAT number, then UK VAT will be charged on the supplies made to you by Zoom. This VAT will be shown on the invoice issued to you by Zoom.
Decision tree – will I be charged VAT?
Every customer is unique and so are their specific tax circumstances. The above stated information should not be considered as tax advice, but as a general overview of relevant tax rules. Zoom cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.