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VAT on Recharges / place of supply

VAT on Recharges / place of supply

A VAT registered client has a client in the USA. Part of the agreement is that the client in the USA will pay for the travelling expenses of staff / contractors. My client engaged an american living in America to do some of the work. The contractor incurred expenses, submitted a claim form and these were then recharged to the client in the USA. As there is no VAT on the sales invoice (place of supply), I am assuming then there is no VAT on the recharged expenses as there would be for a UK client.

And I assume the process is the same for the clients in the EU - Zero Rated EU services on both the sales and recharged expenses invoices?

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21st Mar 2016 21:41

Reverse charge et al

The recharge of expenses from the EU is part of the consideration from the supply by the US contractor which is subject to Reverse Charge on the UK VAT return. The recharge of these expenses is part of the consideration for the supply of services by UK company to American company (B2B services) place of supply US and Outside the Scope.

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