How to charge VAT to EU countries post Brexit

Do you have to be a EU member state to use Reverse charge VAT post Brexit

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We are a small company offering services (training)to UK and EU countries. We used to do Reverse charge to our EU countries pre Brexit. Do we need to register to collect VAT eg in Netherlands or can I still use the reverse charge if Company has VRN. Thank you

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paddle steamer
By DJKL
03rd Jan 2021 12:15

Where is your place of supply, how is this service delivered and where is it delivered?

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Replying to DJKL:
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By Victoria Lloyd
04th Jan 2021 13:09

Hi DJKL
Thank you for your questions. The place of supply once Covid Restrictions lift will be training in the EU countries (mainly in Netherlands). The facilitator goes to EU country to provide face to face training but also has educational support structures (e.g books etc).
I wanted to know if the company has a VRN number can I still do reverse charge for VAT or do I need to register for VAT with each EU country we work in.
Thank you for your help.
Victoria

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Replying to Victoria Lloyd:
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By Matrix
04th Jan 2021 13:14

If the place of supply is the Netherlands then surely there should have been a Dutch VAT registration? I don’t see how the reverse charge was applicable.

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chips_at_mattersey
By Les Howard
03rd Jan 2021 15:39

Are your clients in business or private persons?

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Replying to leshoward:
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By Victoria Lloyd
04th Jan 2021 13:11

Hi Les thank you for your question.
Our clients are big corporate businesses. They have a VRN number and we used to reverse charge but not sure if we can do that anymore and if I need to register to do submit VAT in each of these countries.
Thanks
Victoria

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VAT
By Jason Croke
03rd Jan 2021 15:47

If B2B, place of supply remains where the customer is - if customer is EU, that is outside scope of VAT/but no EC Sales List or need to get customers VAT number, just be satisfied they are a business.

If the customer is a consumer (B2C) then place of supply used to be where supplier is and UK VAT was charged, but now its outside the scope of VAT (same as B2B).

Assuming your services are not digital/Mini One Stop Shop related.

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Replying to Jason Croke:
RedFive
By RedFive
04th Jan 2021 09:54

Hi Jason,

I'm struggling for up to date guidance on B2C post Christmas Eve brexit deal, do you have a useful link for this?

So an e-commerce seller Uk > EU B2C now does NOT charge VAT? Has the de miinimis threshold for registering in the EU country gone too?

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Replying to RedFive:
VAT
By Jason Croke
06th Jan 2021 12:14

Have a look at my post today and then ask your question again, what is an e-commerce seller in the context of this thread?

What are you selling - are you selling web hosting or remote monitoring or are you a website selling stuff like ebay or are you selling digital downloads, it's really important to be clear as to what it is you are selling.

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Replying to Jason Croke:
RedFive
By RedFive
06th Jan 2021 12:39

Thank you for clarifying your original post stating that your reply was just in relation to the OP.

My e-commerce seller (of which I have a handful) is selling goods to consumers in EU Countries, though majority of sales are to UK residents.

Prior to Brexit this was easy - B2C to EU, as long as total in year is below the individual countries registration threshold then UK VAT is accounted for on the sale.

Post Brexit it now appears that UK VAT is not suffered / charged. So more in line with majority of B2B rules but there is confusion as to who then pays VAT. Are we in a position where to continue to sell B2C GOODS then an individual VAT registration needs to be made in each EU country?

There does not seem to be a clear answer on this.

https://www.gov.uk/guidance/vat-on-goods-exported-from-the-uk-notice-703 I'm not sure this answers my question but please point out where it does if I'm being thick.

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Replying to Jason Croke:
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By Matrix
04th Jan 2021 12:16

But under 6.2 the place of supply is in the UK?

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Replying to Matrix:
VAT
By Jason Croke
06th Jan 2021 11:55

Matrix wrote:

But under 6.2 the place of supply is in the UK?


Correct, but under section 12, certain services are deemed to be supplied where the (B2C) customer is. The OP indicated they provide education/training and I would accept that training falls under the examples in paragraph 12.2 or 12.6
https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#...
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Replying to Jason Croke:
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By Victoria Lloyd
04th Jan 2021 13:12

Hi Jason
Our services are non digital. It is training that normally takes place at the businesses location. We deal with big corporate companies who have VRN numbers. Can I still do reverse charge VAT or do I need to set up for VAT registration with all the EU countries we work in and collect VAT?
Thanks
Victoria

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Replying to Jason Croke:
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By Matrix
05th Jan 2021 06:52

Jason Croke wrote:

If the customer is a consumer (B2C) then place of supply used to be where supplier is and UK VAT was charged, but now its outside the scope of VAT (same as B2B).

Please would you clarify as requested above. In the articles you wrote with Neil Warren you say this treatment could apply to professional services such as accounting services but I don’t see how there would be no VAT for B2C for training.

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Replying to Matrix:
VAT
By Jason Croke
06th Jan 2021 12:00

Matrix wrote:

Jason Croke wrote:

If the customer is a consumer (B2C) then place of supply used to be where supplier is and UK VAT was charged, but now its outside the scope of VAT (same as B2B).

Please would you clarify as requested above. In the articles you wrote with Neil Warren you say this treatment could apply to professional services such as accounting services but I don’t see how there would be no VAT for B2C for training.


Sorry, not had a chance to check back on the thread since returning to work.

Para 12.6 of Notice 741A indicates that any service of an intellectual or advisory nature fall under the special B2C rules, I can't see why training cannot be classified as an intellectual or advisory service.

HMRC guidance seems happy to include training/education - https://www.gov.uk/hmrc-internal-manuals/vat-place-of-supply-services/va...

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Replying to Jason Croke:
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By GDavidson
06th Jan 2021 10:10

If the place of supply is in an EU country surely they must register for VAT in that country? You can't just side step VAT because your company is registered in the UK surely?

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Replying to Jason Croke:
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By GDavidson
06th Jan 2021 10:10

If the place of supply is in an EU country surely they must register for VAT in that country? You can't just side step VAT because your company is registered in the UK surely?

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Replying to GDavidson:
VAT
By Jason Croke
06th Jan 2021 12:21

For B2C, most services sees the place of supply shift to where the supplier is, so UK VAT would be charged by a UK seller, but where the customer is not in the EU and where the services supplied are specifically mentioned in the law, such as legal services, then the place of supply shifts back to where the customer is.

Problem with Notice 741A is that it still refers to "non-EU" customers, inferring customers in America or China, but post Brexit, non-EU means non-UK customers.

Neil's article here https://www.accountingweb.co.uk/tax/business-tax/brace-for-brexit-6-eu-c... gives an example of supplying accounting services to a individual consumer in Spain, not being VATable post Brexit.

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Replying to Jason Croke:
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By ArianBloodwood
06th Jan 2021 10:45

Jason - surely it is incorrect that sales to EU are outside the scope of VAT. All HMRC's advice says sales to EU are within the scope of VAT but zero-rated - e.g. here: https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-a...

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
05th Jan 2021 15:48

In addition to your direct appeal to Jason for clarification on the post-deal situation, you can also get some practical advice from his "Brace for Brexit" series with Neil Warren:
https://www.accountingweb.co.uk/content/brace-for-brexit

The topics that seem relevant here are, 6 - VAT on services
https://www.accountingweb.co.uk/tax/business-tax/brace-for-brexit-6-eu-c...
(sorry, but training doesn't appear to be included in the schedule Neil W links to)

and article 18 on the new one-stop shop:
https://www.accountingweb.co.uk/tax/business-tax/brace-for-brexit-18-new...

While you review those pieces, I'm hoping Jason and Les between them may be able to help resolve your query.

Good luck.

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Replying to John Stokdyk:
VAT
By Jason Croke
06th Jan 2021 12:25

John Stokdyk wrote:

In addition to your direct appeal to Jason for clarification on the post-deal situation, you can also get some practical advice from his "Brace for Brexit" series with Neil Warren:
https://www.accountingweb.co.uk/content/brace-for-brexit

The topics that seem relevant here are, 6 - VAT on services
https://www.accountingweb.co.uk/tax/business-tax/brace-for-brexit-6-eu-c...
(sorry, but training doesn't appear to be included in the schedule Neil W links to)

and article 18 on the new one-stop shop:
https://www.accountingweb.co.uk/tax/business-tax/brace-for-brexit-18-new...

While you review those pieces, I'm hoping Jason and Les between them may be able to help resolve your query.

Good luck.


Afternoon john

I've updated this thread, seems I've caused quite a controversy - the last time I caused such a controversy was back when I was at college, but I don't want to talk about that!

Hopefully my latest post will quell any confusions and my apologies to readers who may have misunderstood, I forget that many people read these threads and I don't always take into account the whole audience when posting.

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By petestar1969
05th Jan 2021 16:56

If I may I have a related query.

A client offers tutored booze tastings, they used to be face to face bit are now conducted over Zoom.

The customers are sent the booze by my client's UK-based supplier (who then bill my client). My client then bills their customer for the tutoring and the booze. All my client's customers are corporates and some of them are in the EU.

My client uses Freeagent who have published an article stating that when recording sales of services to EU-based customers my client either needs to pick "reverse charge" or "out of scope" but doesn't make a suggestion as to which option is appropriate.

I thought when we fully left the EU that all trade with them fell out of scope for VAT, much like when UK businesses bill the US or Australia.

Are there two options because one is for B2B and the other for B2C as already explained by someone else on this thread?

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Replying to petestar1969:
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By Matrix
05th Jan 2021 17:17

It sounds like a mixed supply. How is your client currently booking this?

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Replying to Matrix:
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By petestar1969
06th Jan 2021 13:30

My client charges an all-inclusive per head charge for the tutoring and booze.

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VAT
By Jason Croke
06th Jan 2021 12:31

If I can take stock of this thread.

The default rule for B2C supplies of services - pre and post Brexit - is that the place of supply is the UK, regardless of where the customer is, therefore UK VAT applies.

But for certain professional services, the place of supply to non-EU customers is where the (B2C) customer is.

As the OP is supplying training/education my response was based on their situation, but looking back over the thread today, I can see how my post may have not been clear I was referring to the OP's situation and how that might be misinterpreted to mean covering every B2C supply. I need to make better posts, new years resolution #1

Notice 741A, section 12 allows certain services to non-EU consumers to be treated as where the customer is and thus outside the scope of VAT. The list of services in the guidance at 12.2 and 12.6 is fairly long, HMRC manuals at VATPOSS13250 is a little more descriptive but allows supplies of education and training to fall under the special rule.

Post Brexit, EU consumers are Non-EU consumers in the context of VAT, in Neils' B4B article he refers to an Accountant doing work for an Australian consumer, outside scope of VAT and in the next example, a Spanish consumer would be 20% until 31st December and thereafter outside the scope of VAT.

The only other confusion then is whether or not training falls under the certain specialist services rule and I've linked to HMRC manuals that confirm education and training are deemed specialist services and so we can apply the special rule.

I hope that clears things up, but happy to continue the discussion if anyone disagrees or has a different interpretation on this. This is the nature of VAT, a topic that readily opens up debate.

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Replying to Jason Croke:
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By Matrix
06th Jan 2021 14:05

Thanks for coming back. You could tick a box to receive an email when someone replies on a thread.

When you say there is no VAT for B2C for training then do you mean online training or training which takes places where both the teacher and student are physically present?

What would be your view for B2C online training? (This is for my clients, sorry I am hijacking the original question. The advice I received was that this is not education.)

If the courses in the original question take place physically in the Netherlands then are you saying that they don’t have to register for VAT there?

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Replying to Matrix:
RedFive
By RedFive
06th Jan 2021 14:39

@Matrix, double hijack :-) :-) I fear my q is lost in the matrix (see what I did there) above and this thread is off on about 4 diferent directions.
Happy New Year!

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Replying to Jason Croke:
blue sheep
By NH
07th Jan 2021 13:51

The point that seems to have been missed as far as I can see is that if you supply B2C services that are on the list for special treatment (Professional, technical, advertising, consulting, staff, financial services, intellectual or intangible, data processing services) that may well be outside the scope of UK VAT but they are well within the scope of VAT in the place where your customer belongs which implies a requirement to register for VAT in another country which in my experience is a very long, difficult and expensive process.

Is that the way you see it Jason?

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VAT
By Jason Croke
06th Jan 2021 12:42

https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#...

HMRC published revised guidance on place of supply of services 31 December 2020 and section 12 is now revised, it removes reference to "non-EU customers" and now just refers to "customers outside the UK". The rest of section 12 is unchanged.

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By Lucyruth
08th Jan 2021 09:23

Can I pick up on a point queried in previous posts but not answered. For supply of services where place of supply is where customer is (whether B2B or B2C) do you now have to look at registering in country where customers are post 1 January?

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Replying to Lucyruth:
blue sheep
By NH
08th Jan 2021 09:35

Lucyruth wrote:

Can I pick up on a point queried in previous posts but not answered. For supply of services where place of supply is where customer is (whether B2B or B2C) do you now have to look at registering in country where customers are post 1 January?

Precisely the same question I asked above - in Neil's article he says no but on other respected sites I have read yes

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Replying to NH:
RedFive
By RedFive
08th Jan 2021 10:07

This is all a bit of a mess isn't it?

I'm none the wiser and more confused that I was at the start of the thread with regard to B2C or on your point.

It's looking more likely now that to sell goods or certain services in EU you have to register in each Country. I once did Frnace & Germany for a client. Got there in the end but what a nightmare and the client never did appreciate the hassle I went through to do it. Offloaded him eventually thankfully.

This is not the Brexit we were promised is it? :-) :-) :-) :-) :-)

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Replying to RedFive:
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By Matrix
08th Jan 2021 13:28

I have a good firm to whom I outsource all non-UK VAT work if you need it.

I am also confused. A lot of the articles and answers here disagree with the advice I received for clients. I may need to get it in writing if the experts are also finding it difficult.

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