VAT charge to a Spanish VAT registered customer

Invoicing a Spanish client registered for VAT in Spain for services carried in the UK

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I need to invoice a Spanish client registered for VAT in Spain for services carried in the UK. The services provided are installation of a small LED wall. 

As the services are being provided in the UK wouldn't I need to charge UK VAT on it? Or would I invoice it with no VAT under the reverse charge scheme?

Many thanks in advance! 

Replies (13)

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By WhichTyler
20th May 2019 16:49

If the wall was installed (permanently?) in a UK building it is probably UK VATable

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blue sheep
By NH
21st May 2019 06:18

Google "place of supply rules services UK VAT" and that will take you to the HMRC guidance which is fairly clear

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Replying to NH:
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By Georgeoleniuc
21st May 2019 15:39

Thanks for the reply! I did read the VAT place of supply of services notice 741A, but I am still a bit confused because section 2.2 makes me believe that I should charge VAT, but according to section 6.3 I should not:

Paragraph 2.2: "If you belong in the UK and the place of supply of your services is the UK, you must charge any UK VAT due and account for it to HMRC regardless of where your customer belongs. If the place of supply of your services is another member state, you or your customer may be liable to account for any VAT due to the tax authorities of that country"

6.3 B2B supplies
"The B2B general rule for supplies of services is that the supply is made where the customer belongs.

Where the B2B rule applies you should obtain commercial evidence showing that your customer is in business and belongs outside the UK. VAT registration numbers are the best evidence that your EU customer is in business. If your customer is unable to provide a VAT number you can accept alternative evidence. This includes certificates from fiscal authorities or other commercial documents indicating the nature of the customer’s activities in their home country. Such evidence should be kept as part of your records.

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Replying to Georgeoleniuc:
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By WhichTyler
21st May 2019 15:49

Yeah but s7 though...

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Replying to WhichTyler:
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By Georgeoleniuc
21st May 2019 16:01

To be more specific, this is not an actual wall, it's a LED TV wall, so it can be dismantled or moved without destroying or altering the building or construction.

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Replying to Georgeoleniuc:
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By WhichTyler
21st May 2019 16:21

So you are supplying goods that don't leave the country (like the studio recording equipment in the example in 7.8) so still UK VATable...

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Replying to WhichTyler:
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By WhichTyler
21st May 2019 17:00

As a rule of thumb I tend to think if some one says 'please can you install an LED wall/kitchen/recording studio IN MY HOUSE IN ENGLAND' it is pretty clear where the supply is made.

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Replying to WhichTyler:
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By Georgeoleniuc
22nd May 2019 09:08

It is very clear that the place of install is UK, but according to 2.2 "the place of supply of your services is the UK" and according to 6.3 "The B2B general rule for supplies of services is that the supply is made where the customer belongs".

I will go with 6.3 as it seems more reasonable.

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Replying to Georgeoleniuc:
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By paul.benny
22nd May 2019 09:18

I think you have made the wrong decision.

If the place of supply is the UK and you charge UK VAT and your customer can make an 8th directive claim to recover. No net cost to customer. No risk to you.

If you zero-rate on the basis that the customer 'belongs' in Spain but HMRC consider the transaction should have been standard rate, you will have to account for VAT on the amount charged. Cost to you 1/6 of invoice amount. No upside for you.

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Replying to paul.benny:
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By Georgeoleniuc
22nd May 2019 09:34

That is a very valid point indeed, thank you! I called HMRC VAT helpline and I explained them the situation in detail and they advised me to use the 6.3 for this transaction.

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Replying to WhichTyler:
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By Georgeoleniuc
22nd May 2019 08:25

No, we are not supplying any goods, we are only doing the installation.

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By Vile Nortin Naipaan
21st May 2019 16:51

It's a supply of goods FFS. Where were they at the time of the supply? Did the supply involve their removal from the UK?

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Replying to Vile Nortin Naipaan:
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By Georgeoleniuc
22nd May 2019 09:10

I'm sorry, but you're not following, please see the below thread. This is only a supply of services.

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