This morning I received an email from the powers that be which included a note about overseas businesses and VAT, referring me to HMRC's briefing note 31 /12 - http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.por... .
Now this is all horribly complicated, and I really need some examples to figure out exactly what they mean by this!
Suppose someone organizes an annual seminar for a mixture of privately and business funded people in London as a joint venture with a non UK resident/domiciled US academic, and they share the profits. Would the US academic now have to be registered for VAT? (Assuming that the share of profits is below the current VAT registration rate.)
How about a UK company which publishes a magazine many of whose contributors and editors are spread through out the world, none of whom are on the payroll and who invoice the UK company for their work. Would they now have to be UK VAT registered?
And how about Usain Bolt, if he could be persuaded to come here?
Thanks to any one who's got their heads round this and who can help!
Greg
Replies (6)
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far too many questions and not enough info
if there is a JV the JV registers
not necess the constituent parties
depends on the contract , if written
oversea magazine contributors dont register
forget about UB and the like they wont come because of tax
http://www.hmrc.gov.uk/feu/feu.htm
it looks like you need advice for which you will have to pay
the easiest example is land-based
The best example I have heard is regarding Irish land-based supplies. A Dubliner will normally B2C supply to Irish customers, thus charging Irish VAT at 22% approx. If his supply is land-based [e.g. on a building project] it is taxable where the land is based. Thus UK land-related services in Belfast will have a 20% UK VAT charge, except that the threshold is over £77,000 annually. Thus a Dublin-based supplier can probably charge nil UK vat, being under the threshold, for B2C supplies. But NOW from 2012 there is a nil threshold. Mr. Dubliner will have to register for UK VAT, if he is a non-established person in the UK, and if he is to carry out any UK supplies. [I think I am correct that if they are B2B and land-based, to a UK customer, then they can be reverse charged.]Restaurant and catering supplies are supplied where they are carried out,they are just like e.g. artistic and sport and educational [B2C supplies only] services, and transport hire supplies are similar too.Usain Bolt supplies his services where they are carried out, and so UK-based = a UK supply, unless they are actually B2B supplies. B2B sporting supplies are located where the customer is.The same Eire problem thus applies to the Dover / Calais border, I suspect!
i may be wrong but
I do not think the base of the reverse charge is dependent upon Iraqi or e.g. American position. This is a B2B supply, and so the UK-based customer [UK place of Supply] adds it to his box 1, and adds it to his box 4 VAT, so box 5 net is a Zero.
But If it's a B2C professional supply, made to a UK private customer, the Place of Supply is now outside the UK.
Paperwork
If there's no agreement, there's a risk that HMRC will see it in they way that is most advanageous to them. If it were me I would have a letter of agreement between the US chap and the UK one to the effect that the UK one has the right to charge admission, and the the US one will receive a fee for their marketing the project in the US, supplying IP & consultancy to the project (so services not related to land). The fee is calculated with reference to the profit (however defined).