Vat on services from EU B2B or B2C?

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My client sells digital software around the world. He is registered for VAT MOSS and charges VAT on his supplies to EU consumers but has not met the U.K. VAT threshold yet so does not charge VAT on U.K. sales. 

He now wants to employ a contractor in Germany to do some work for him. The contractor is VAT registered. 

Does the contractor charge VAT to my client as a B2C transaction or does my client treat this as a B2B transaction and use the reverse charge? I'm so confused and would be so grateful for some clarification. 

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chips_at_mattersey
By Les Howard
03rd Aug 2017 11:11

The supply by the German contractor is a General Rule supply, so subject to the Reverse Charge by your Client.

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By Jess Banks
03rd Aug 2017 19:06

Amazing, thanks for clarifying.

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By Accountingweb123
07th Nov 2017 05:16

I am not sure this is true.

"If you belong in the UK but aren’t already UK VAT registered and you receive supplies of B2B general rule services from overseas suppliers (that are treated as supplied where the recipient belongs), the value of those supplies must be added to the value of your own taxable supplies when determining whether you should be registered for UK VAT. Even if you make no taxable supplies yourself you may still be required to register if the value of general rule services received from overseas suppliers exceeds the registration thresholds."

Section 5.7 from: https://www.gov.uk/government/publications/vat-notice-741a-place-of-supp...

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By Portia Nina Levin
07th Nov 2017 10:54

All perfectly true. Does somebody want some attention?

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