Myself & my FD are under dispute as to whether the new VAT Domestic Re-charge applies to Intercompany Invoicing.
I say yes as both companies are VAT Registered and under the CIS Scheme (all our work is Construction) and he believes not as it's Intercompany. Neither of us an find any literature or guidence on the HMRC site and we have been waitng for a call back from HMRC VAT department since the beginning of February. Yes we have tried again and we are just being told they are inundated with questions at this time and will get back to us as soon as possible.
Anyone here come across this yet or have an opinion this would be greatly appreciated.
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The 'technical guide' is here: https://www.gov.uk/guidance/vat-reverse-charge-technical-guide
There would seem to be some exceptions. Do any of these apply in your case?
Unless you are in a VAT group, then inter-company transactions follow the normal VAT rules. You don't state what it is you are recharging and that makes a difference to the answer.
It could be argued the recharge is a disbursement but the rules for disbursement are quite precise and all conditions must be met for it to be a disbursement https://www.gov.uk/guidance/vat-guide-notice-700#section25 - section 25
If the recharge is just of employees who are employed by one entity but work across both companies, you can consider paymaster services https://www.gov.uk/guidance/companies-that-supply-staff-and-staff-bureau... - section 3.3
So the question you ask is quite nuanced and doubt HMRC will give you an answer. What is it that Company A is supplying to Company B? Staff, construction services, materials, something else?
Everybody here has said DRC is applicable in your case - or a least there is no reason for it not to apply.
The only contrary "evidence" is your boss thinking he read it somewhere.
Ultimately he is accountable for the VAT return and he has a choice: go with what he thinks he read; follow the guidance, your expertise and the weight of advice here. Or pay the company's advisers for some formal advice.