Revenue Note for Guidance

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Revenue Note for Guidance

Chapter 2 - General rules

5. Persons who are, or who may become, accountable persons

This section sets out the core rules on persons who are, or are likely to become, accountable persons for VAT purposes. It provides that an accountable person is a person in the business of selling taxable goods or services (in other words, goods or services that are not categorised as being exempt from VAT) in the State. Persons who make intra-Community acquisitions of goods and persons who receive certain services from abroad for business purposes (where the place of supply is deemed to be the State) are accountable persons. Persons who are jointly and severally liable for tax under section 108C are also accountable persons.

The section also specifies cases where suppliers that are not established in the State, but that make supplies into the State, are not accountable. These cases cover suppliers of goods installed in the State, gas and electricity suppliers and non-established subcontractors. In these cases, the accountable person is the person who receives the supply – this is provided for in other sections of Part 2.

Finally, the section provides for a situation where a person may be deemed to be an accountable person, where it is expected that he or she is likely to become accountable.

Details

(1)(a) A taxable person who supplies taxable goods or services (in other words, goods or services that are not VAT-exempt, as defined in section 2(1)) in the State is an accountable person and is accountable for, and liable to pay, the VAT charged on the supply.

(1)(b) Persons who are involved in intra-Community trade or are in receipt of services from abroad (professional and other services where the place of supply is the State) are also accountable persons. In addition, persons who are jointly and severally liable for tax under section 108C are accountable persons.

(1)(c) However, persons who do not have an establishment in the State but who supply and install goods in the State or persons who supply gas or electricity to public bodies and business customers in the State are not accountable persons. In addition, a non-established subcontractor who supplies construction services to a principal contractor is not an accountable person in respect of those services.

(2) Subsection (2) deals with a situation where an unregistered trader whose turnover has been below the registration thresholds may be required to register for VAT because of an increase in that turnover.

Example:

Where turnover of a small trader exceeds one-sixth of the appropriate annual limit in a taxable period and it is clear that the new situation is likely to continue he/she would be required to register from the commencement of the next taxable period. However, if a spike in turnover was exceptional – for example, because of the seasonal nature of his or her business – and it is unlikely that the relevant annual limit would be exceeded, the trader would not be required to register.

Relevant Date: Finance Act 2019