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Vat on provision of services to France

Vat on provision of services to France

Could anyone resolve this dispute?

I am a a book keeper for a partial vat registered training services provider based in the UK.  We have acquired a new French based company and we provide training services to French students in the UK.  The accountant states that we should be charging UK Vat at 20% however, a HMRC representative is saying that it is outside the scope of UK vat but should be shown as taxable supplies at 0% on the actual vat return.

Has anyone any experience of this?




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12th Jul 2012 14:47

Not enough information

What training is being provided? Is it English as a Foreign Language, for example.

Who is it being provided to? Individual students of business for their employees?

When was it/is it being provided?

Personally, I'm backing the accountant. HMRC's advice is terrible and I'm detecting a weakness on your part when it comes to VAT; there's no such thing as a partial VAT registered business - it's either registered or it's not - I suspect you mean partially exempt.

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By Siany
to Ruddles
12th Jul 2012 15:05



Apologies for the unfortunate wording, the business is partial vat exempt which as you know can be quite complicated when completing a vat return, however I suspect you knew what I meant but chose to "pick up" on the wording instead of offering constructive advice! 

The training is being provided to students of a French Company, it is B2B and not B2C.

The training provided ranges from adminisration to management, basically they offer career guidance and advice.

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12th Jul 2012 15:33

Apologies for being "picky"...

... but there's still an absence of clarity and rather a lot left to assume.

I assume that when you said in your origianl post "we have acquired a new French based company", that you mean you've acquired it as a customer (as opposed to a subsidiary).

Then I assume that when you say that the training is being provided to the students of the French company, that you mean that the supply is being made to the French company (ie they're the ones that ordered it, are invoiced for it and pay for it), albeit that it's individual employees of the French company that attend the training, such that it is, as you assert, B2B.

I also assume that the French company doesn't have a fixed place of business in the UK with which the supplies are closely connected.

I further assume that the supplies concerned were made on or after 1 January 2011.

All those assumptions being the case, the supply is outside the scope of UK VAT (but would be standard-rated if it were a UK supply), so the French customer will need to acquisition account for it.

Because the supply would be taxable if it were made here, any input VAT directly attributable to it is recoverable and the value of the supply should be treated as a taxable supply for the purposes of your partial exemption calculation.

Apologies for my initial failure to provide constructive advice and being "picky", but I've also got a tendency to assume that people that don't provide all the information necessary to enable constructive advice to be offered, don't fully understand their question, and pickiness is an essential means of ensuring you draw out all of the facts (which still didn't come!).

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By Siany
to raybackler
12th Jul 2012 15:47

Point well made and taken on board. I have a tendancy to assume that everyone already knows what I am talking about forgetting that they do not have all the necessary information to answer the question.


Yes, the business is a customer based in France and yes, they order the training and are invoiced for it. There is no UK base for the French company. The services are only now being provided so yes, it is after the change of place of supply ruling which came into effect 1st Jan 2011. HMRC are saying as you state that it is a taxable supply for partial vat exempt purposes, however the accountant is saying we should be charging vat at 20% and consequently, the business has raised vat invoices at 20%. I've trawled HMRC website but can find nothing which is conclusive. 

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12th Jul 2012 16:21

There's a nice little table...

... in VAT Notice 741A at paragraph 8.1.1.

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By Siany
to The Highlander
12th Jul 2012 17:10

Thanks George


I had seen this, I must admit that to me it seemed a little ambiguous, but from this notice, I deduced that 20% uk vat should not be charged, however, the accountant is saying otherwise.

Thank you for your help :o)

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