Quick VAT question

Quick VAT question

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I have just about to bill a client who lives in Dubai for work done in teh last 12 months.

She went to Dubai half way through the year

Ther services were her Tax returns 2011 (late) done while she was still in the UK and 2012 done in January - she went in SEptember.

In addition the bill also covers the work I did for her (now) struckoff company - VAT rtns, payroll, Final CT600, P35 and Final vat rtn, I did this between March and November.

Normally very simple with regard place of supply, but this is a bit of a mixture - i'm having a bad day so any quick answers will help me get on with other stuff!

Replies (10)

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By shaun king
29th Mar 2013 19:21

Work on the tax point which I suspect will mean place of supply will be Dubai.

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By Yoyo29
29th Mar 2013 20:17

consider the client's place of belonging

You would have to consider the client's place of belonging and also the place where the services provided is mostly directed. 

Sections 3.6 and 3.6.1 of VAT notice 741A (linked below) explains it all.

VAT Notice 741A

If my understanding of the sections is correct you would charge VAT because the services you provided related to her UK Tax returns. 

Hopes this helps.

 

 

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By Darren Loring
30th Mar 2013 10:35

All UK place of supply?

Surely if the work related to UK taxes then the place of supply is UK, therefore all Vatable?

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By User deleted
30th Mar 2013 11:09

Not so straightforward, DArren

For accountancy services, treatment will depend on place of supply, which in turn depends on (a) whether or not the client is a business and (b) where the client belongs (UK, EU or elsewhere)

There is the added complication of deciding the time of the supply, and in that context whther or not the accountant's services are continuous.

Assuming that the company is/was a UK company, operating in the UK, I'd say that the fees to it ought normally to have been VATable. But since the company has been struck off, who is going to be billed? I'm not going to think too hard about it, given it's Easter, but I'd say that in any event the company was still the recipient of the supply, and so VATable.

As for the personal tax returns, I'd be inclined to say not VATable, on the assumption that HMRC would accept that the services were continuous.

But there are other contributors here that are far more knowledgable about VAT than I am.

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By Steve Kesby
30th Mar 2013 11:21

I'm only guessing...

... but the facts described point to "the client" as having shut up shop on her UK incorporated business and moved to Dubai to take up employment?

So the company was a relevant business person up until its closure. As BKD says, any services relating to the company were (UK) supplies to the UK company, whoever actually ultimately pays for them.

Any supplies to the client herself don't seem to have been made to a relevant business person and so are UK supplies irrespective of where she is.

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By User deleted
30th Mar 2013 11:42

I disagree with your last point, Steve

Accountancy (and other listed services) provided to a non-business customer who belongs outside the EU are treated as made where the customer belongs. I do hope that's correct, or I've got some serious explaining to do with HMRC (as have Tolleys and CCH) :¬)

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By Steve Kesby
04th Apr 2013 11:10

Oops agreed!

Yes. I was a little too hasty there.

On the when/where aspect. A agree that they might be regarded as continuous supply, but if they aren't the tax point (since the services were supplied no later than 31 January and are only being billed now) is when the services were performed in any event. So only the 2012 Tax Return would be non-UK.

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By Ding Dong
30th Mar 2013 12:12

glad I asked !

From the latest responses (thanks Steve and BKD) it would appear the company fees are UK Supplies and the TRs are UK supply for 2011 and non UK 2012.                              Isn't VAT a pain!                           Happy Easter!

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By Ding Dong
30th Mar 2013 12:14

last question

Am I right in assuming the 2012 TR services are therefore OUTSIDE the scope and so do not need to be entered on my VAT rtns? Over cautious on this one now!

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By User deleted
30th Mar 2013 12:30

I'm a little confused by your last post, Steve

If (and it's a big if) the personal tax services are deemed to be continuous, the Regs are quite clear - the taxpoint is the earlier of payment and invoice (subject to special rules about regular payments under lease etc agreements). So the 2011 return work could also be O/S (in any event, the 31 Jan date is a red herring, since the 2011 return was completed late, albeit when the client was still in the UK).

But agreed that it they're not continuous the time of supply is, at the latest, when the service was completed.

If I were OP I'd err on side of caution (I think that HMRC would argue that preparation of tax returns are discrete supplies - it could come down to the wording of the engagement letter) and charge VAT as he suggests - on the company work and the 2011 tax work, but not the 2012 tax return.

 

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