VAT on 'overseas' services

VAT on 'overseas' services

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My client lives and works in Greece. He does work on traffic management schemes, advising UK councils where to locate traffic lights, crossings etc. This is based on computer analysis of info sent to him by the councils. Does he need to charge UK VAT on his services?
Andy

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Euan's picture
By Euan MacLennan
26th Nov 2008 11:13

Yes - it's wrong
It all depends on the rules for the place of supply of services. If the services set out in VATA 1994 Sch.5 (including the professional services of engineers, computer consultants, etc.) are for non-business purposes (it is difficult to see how the siting of traffic lights could be a business activity) and/or are supplied to a (local) government body, it falls back to the default rule that the services are supplied where the supplier belongs, which is Greece and not the UK.

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Euan's picture
By Euan MacLennan
25th Nov 2008 14:12

Place of supply of services
The services of consultants, engineers, etc., are normally treated as supplied where the recipient belongs (UK) if they are supplied for his business purposes (and the recipient would then account for UK VAT under the reverse charge procedures).

However, there is an override where the recipient is a government body or municipal authority, unless they can say it is for business purposes, which does not seem likely in this case. This means that the service is supplied where the supplier belongs (Greece) and your client should be registering there if he exceeds the local threshold and charging Greek FPA.

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