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VAT on US invoices

I have spoken to Helplines and nearly driven myself mad reading HMRC guidelines about the treatment of VAT for a customer in USA. The three situations are:

1. Training received in USA - client invoiced US supplier for time and expenses – no supply (or as HMRC said no consideration) so outside the scope for VAT. Invoice and associated expenses do not appear on VAT Return. (Strange one this as UK company actually paid for being trained!)

2. Training provided in USA – invoice to US company.

3. Training provided in UK – invoice to US company (for training UK users of their software)

I have come to the conclusion after reading about B2B and Place of Belonging that 2 and 3 are out of scope, but would that mean the associated expenses, especially in example 3 are also out of scope and the input tax not recoverable? I have probably read so much I am now missing the relevant points and the guidance in VAT Notice 741A just seems to go round in circles. Has anyone come across a similar situation?

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Place of supply

You need to determine the place of supply for each of the transactions.

1.  I have read your post several times but don't understand the circumstances you outline.  UK company paying for being trained - why is that strange?

2.  Since 1 Jan 2011, training generally falls under the general place of supply rule, which is where the customer is located.  The only exception is if you charge a "per head" admission fee, in which case it is considered admission to an event and therefore a physically performed service.  Since there is only one client, I have assumed there isn't a "per head" admission fee and therefore the general rule applies.  Place of supply is where the client is located, which is USA.  Outside the scope of UK VAT.  You should consider whether US VAT might apply.

3.  Again, assume that there is not a "per head" admission fee, and instead that it is training services falling under the basic rule.  Place of supply is where the client is located, which is USA.  Outside the scope of UK VAT.  You should consider whether US VAT might apply.

Providing services which are outside the scope of UK VAT does not affect your reclaim of UK input VAT.  You are thinking of exempt supplies, which are different.

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