Please note, if you are not VAT registered this does not apply to you.
Why has the client requested a VAT invoice?
As VAT registered businesses, a lot of our corporate clients can claim back from the government the VAT included in the price of artworks they buy through Rise Art. In order to do this, they need a record of how much they are entitled to - this comes in the form of VAT invoices.
Why must I create the invoice?
Because you are selling the artwork, the invoice must come from you. We are just the agent through which you sell it, so we do not pay VAT on the sale of the actual artwork and therefore we aren’t the ones to issue the invoice.
Please note that VAT rules vary between countries, if you are in any doubt on how to proceed after receiving a request for an invoice seek local advice. For example, if you are an EU seller selling to a customer outside the EU, VAT will not usually be applicable.
I don’t want to make a VAT invoice for an amount I didn’t receive.
The amount we will ask you to invoice will be the sale price of the artwork, which is more than you will get after our commission. However, the numbers do add up, as the commission statement that we will have sent you doubles as a VAT invoice from us for the commission that we will have taken.
How do I work out VAT?
When we request an invoice, we will specify and ask you to include the item list price and shipping and handling costs. Both of these prices are inclusive of VAT, so the grand total after VAT has been added should equal the sum of these two costs.
This means that the amounts that you put into the invoice before the grand total must have VAT taken off of them in order to account for the VAT that will be added before the grand total. This is not as simple as taking away 20%, but there are tools available online to do it for you.
For example, if we request an invoice for a work that you sold for £1,000 with shipping and handling costs of £100, your VAT invoice would break down like this:
Item price: £833.33 (item price minus VAT @ 20%)
Shipping and handling: £83.33 (shipping and handling cost minus VAT @ 20%)
VAT: £183.34 (20% of subtotal)
Grand total: £1,100 (subtotal plus VAT)