VAT - EU to UK Business to Business Services

Should a UK Company receive an invoice from a Spanish Company (B2B Business Services) with VAT?

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We are a small PR business VAT registered and based in the UK.

We have contracted a Spanish based Marketing agency to perform services for us. The Spanish company has issued our business with an invoice and included IVA (Spanish VAT at 21%) on the invoice.

My reading of HMRC guidance is that for B2B services that reverse charge rules would apply to services to a UK business and that the supplier would not add IVA to the sales invoice. (Ie. The place of supply for the services we have received is the UK). HMRC website suggests that reverse charge applies to almost all B2B supplies of services.

Is this interpretation correct?

I can find limited guidance from an EU perspective so have used what I believe is the relevant UK guidance. Before I asked the supplier to change I thought it would be prudent to check. 



Replies (3)

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By jcace
29th Jan 2024 19:43

Check first whether they have charged you Spanish IVA (Standard rate appears to be 21%) or UK VAT, with valid UK VAT Registration.

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By Smess
29th Jan 2024 20:00

Thanks for the reply.
No they have definitely charged the Spanish standard rate of 21% and are a registered Spanish company rather than a UK Company.

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By Moonbeam
30th Jan 2024 14:26

I suspect your supplier hasn't asked you for your UK VAT number. Or it could be that whoever produced the sales invoice to you hasn't been trained that quoting your UK VAT number on their invoice should enable them to reverse charge the invoice.
Your contact there should be able to sort this out for you, credit the original invoice and issue a new correct one.
Given that most small businesses in the UK don't understand this procedure, I'll bet the same thing applies elsewhere.

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