HMRC Guidance - VAT on EC supply of services

VAT Notice 725 focuses on goods exported - which notice refers to rules on services?

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I'm receiving services from a touring theatre company based outside the UK. He's zero rating his invoice. All well and good.

I will also be supplying services during his time in the UK - providing technician time for the purpose of setting him up in our venue. I will be charging UK VAT on these services, given that I'm clearly supplying them right here. He doesn't seem happy with this - he's expecting me to zero rate my supply. I'd like to skip the back-and-forth and simply quote from the notices.

VAT Notice 725 talks at length about supply of goods for export, but lacks guidance on services. Is 741a the only notice that deals with supply of services? Are there any other bits of HMRC guidance that would be clearer in nailing down my argument?

Replies (13)

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By Wanderer
15th Feb 2017 12:41

Is it one of those things that is so basic that it's not covered in the guidance?

i.e. you are supplying services in the UK so UK VAT is chargeable?

Can't see that there is an 'export of services'.

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Replying to Wanderer:
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By Cactuscat
15th Feb 2017 14:30

Well, yeah, that's sort of my point. It seems so obvious to me that I can't understand his position!

EDIT:
I can now totally understand his position.

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By sandor
15th Feb 2017 12:44

If the place of supply (of goods or services) is in the UK then UK Vat applies, even if he doesn't like it.

He still has the possibility to recover the vat through his home vat system in much the same way as can be done for say travelling expenses when a UK business has someone in Europe and has receipts issued outside the UK with vat on them, so ultimately he will get it back although this is a bit of a long winded process.

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By Haemorrhoid
15th Feb 2017 13:00

Yes, IF the place of supply is the UK then VAT is chargeable.

But it is not clear whether the place of supply is the UK.

For instance, if I transport goods from London to Newcastle for a French business, my supply takes place in France.

You're reading the wrong bleedin' VAT Notice. VAT Notice 741A is what you are looking for.

From what you say, I think that our place of supply is where your business customer is, unless your supply is considered to be related to land in the UK.

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Replying to Haemorrhoid:
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By Wanderer
15th Feb 2017 13:02

Portia Back?

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Replying to Haemorrhoid:
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By Cactuscat
15th Feb 2017 13:45

But that's Freight, which is 744B - it's explicit within its own notice. I'm not supplying anything on the section 6 list.

I understand your point - that's rather why I raised this question. His interpretation of 741A follows yours - mine doesn't. I'm supplying a service within the UK, it's "used up" within the UK, and it's in connection with an event happening within the UK.

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Replying to Haemorrhoid:
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By Cactuscat
15th Feb 2017 13:48

Interestingly, the adviser on the HMRC helpline agreed with both interpretations. This amuses me, but it doesn't really help.

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Replying to Cactuscat:
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By Haemorrhoid
15th Feb 2017 13:59

If it not related to admission to the event and is not related to land, then the place of supply is where the customer belongs. The rules on freight in the context I quoted come from the same legislation.

Consumption has nothing to do with it, except in the context of services that are deemed to be supplied where they are effectively used and enjoyed, and this does not seem to be such a service.

Just get your accountant to give you advice in writing, then if there's any comeback, you have somebody to sue. Job done.

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Replying to Haemorrhoid:
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By Cactuscat
15th Feb 2017 14:28

All our Finance is in-house, no accountant to sue! I'm waiting on steer from the FD; "free internet advice" wasn't my only recourse ;) She's out of office, however, and I'm trying to deal with this chap asap, hence using every available route.

The rules on freight in 741A say "see 744B" :P

I agree with you re section 9 - neither of us is actually charging the other for admission to an event.

I think you have turned me round on this one... Interesting. Thanks.

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By Haemorrhoid
15th Feb 2017 13:03

This is what happens when people seek free advice from the internet. They get crap advice from the internet.

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By sandor
15th Feb 2017 13:57

The problem is, that many EU business's who are involved in cross border transactions are so used to quoting their VAT number and having a purchase invoice issued to them without VAT on it just because they have quoted their vat number, that it oftern comes as a surprise in circumstances like the one highlighted here.

In Italy for example it is almost without exception that business (even retailers) will ask foreigners if they are VAT registered and offer to issue the invoice without VAT.

The point of course is that the goods should be going back to the UK in order for the invoice to be issued without VAT. Clearly however it is not possible to take the service back to the recipients home country, so the place of supply is in the country where the service is supplied.

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Replying to sandor:
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By Haemorrhoid
15th Feb 2017 14:01

sandor wrote:

The point of course is that the goods should be going back to the UK in order for the invoice to be issued without VAT. Clearly however it is not possible to take the service back to the recipients home country, so the place of supply is in the country where the service is supplied.

This is just crap!

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Replying to sandor:
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By shaun king
15th Feb 2017 14:37

Not sure what Italy has to do with this question as the supply is governed by UK VAT legislation and as has been mentioned earlier unless the service is land related or caught by the use and enjoyment rules then the place of supply for B2B services is the country where the recipient is established

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