Charge Vat or not

Charge Vat or not

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Do I charge Vat in the following circumstances for the completion of a personal tax return for a non resident individual.

Based in France- I think I do as in EC.

Based in New Zealand- I think it is outside the scope of vat, but am not sure as supply of service is in UK?

Martin

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By spidersong
20th May 2009 09:12

Place of Supply Order / Schedule 5
Section 7 of the VAT Act covers place of supply, and allows for orders to be made to allow for varying circumstances.

The VAT (Place of Supply of Services) Order 1992 (1992/3121) is one such order and at Para 16 allows that where a service is in Schedule 5 of the VAT Act 1994 (services of consultants......accountants and other similar services is item 3 of Schedule 5) then it 'shall be treated as made where the recipient belongs'.

BUT...
for Para 16 to apply the person receiving the supply in another member state must receive the supply "for the purpose of a business carried on by him".

I would've thought it quite likely that a personal tax return was a personal matter, not a business one, and therefore VAT should be charged to the French customer.

Normally to demonstrate that a customer receives a supply for business purposes you will make use of the customers VAT/TVA registration number, although this isn't strictly a requirement.

Para 16 doesn't require any such caveat for supplies outside the member states and so the supply to New Zeland is a supply in New Zeland and outside the scope of UK VAT.


In terms of HMRC publications you need to look at Notice 741 - Place of Supply of Services - Section 12. Note:
"12.4 What is the place of supply of my services if my customer belongs in another Member State?
If, as a UK supplier, you supply these services to a person who belongs in another Member State, who receives the supply for business purposes, the place of supply of your services is your customer’s country.

Your customer accounts for any VAT due in that Member State.

If they are not received for business purposes, your services are supplied in the UK (see section 5)."

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By User deleted
20th May 2009 08:20

Penny & Ian- thankyou for your comments
Penny can you direct me to where I can read about ' no vat for the French client'. I was not aware of this particular point about, 'where service received'

Thankyou in advance

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By User deleted
19th May 2009 16:22

No
Services supplied where received. Supply in France is outside scope of UK VAT

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By finer
19th May 2009 15:49

VAT on foreign clients
I believe the position is as follows:
Client based in France should be charged VAT unless they are VAT registered in which case you should show this on your zero rate invoice.
Client based in New Zealand there is no VAT to charge

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