Overseas business registering for UK VAT

Overseas business registering for UK VAT

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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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By carnmores
28th Nov 2012 13:44

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

 

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By Greenheys
28th Nov 2012 15:01

Overseas VAT

Carnmores,

Thanks for your response.

I was hoping to open up a discussion, and am emphatically not a leach looking to pick your brains and then scurry off into the darkness never to reciprocate to the community in these pages  (which I think is the general idea - and which I think you'll find I do).

In the JV example, I was not thinking of a formal "Joint Venture" with paperwork and fingerprints, rather an example of the quite common informal arrangement between academics who together from time to time put on a show, and split the profits.  In the example, let's assume that everything's done right in the UK, and the US academic having done his stuff returns home and a few weeks later gets a cheque from the UK being his share.  Does HMRC's guidance mean he should register for VAT in the UK?

I rather suspect that this fictional hero would express the opinion put in Arkell v. Pressdram and decline, instead inviting the UK fictional academic to New York, where the tax authorities are so much nicer (from his point of view).

 

As to overseas editors/contributors, why wouldn't they register (other than the obvious Arkell point above.)

 

Thanks again.

 

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By CrowtherP
28th Nov 2012 15:09

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!

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By Greenheys
28th Nov 2012 15:20

NETP UK VAT

Thanks CrowtherP.

So what happens in your example 1 B2B if it's not a Dubliner and not land based, but an Iraqi supplying say web site design services (or some other professional service delivered electronically) ?  How would the UK Customer reverse charge if the supplier refuses to register for VAT?

 

Thanks,

 

Greg

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By CrowtherP
28th Nov 2012 15:33

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.

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By WhichTyler
28th Nov 2012 15:50

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).

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