UK events company provides consultancy services (stage, lighting and sound design) to an events production company based in Thailand putting on a festival in Thailand. The UK events company is registered for VAT in the UK but does not charge VAT on its services to the Thai business because the place of supply between the two businesses is Thailand and it is therefore outside the scope of UK VAT.
The UK events company engages a UK PR agency to undertake PR work to promote in the UK the festival taking place in Thailand, the PR agency charges the UK events company VAT. Can the UK events company reclaim the VAT it has paid to the PR agency or not?
As stated above the UK events company is registered for VAT in the UK but as the PR agency’s services being paid for are related to an event that is taking place outside the UK and therefore outside the scope of UK output VAT is the input VAT on the PR agency’s invoice non-reclaimable?