UK Company with one foreign subsidiary. Directors based overseas and all management decisions made in the country outside the UK
The UK company has a virtual business address and bank account. There are no employees and it has not started to trade. My client is no VAT Registered.
THE UK company and its subsidiaries has had an audit carried out by a UK auditor and the UK auditor has charged VAT. My understanding that is a UK company raised an invoice to another UK company then VAT should always be charged
However, The B2B general rule for supplies of services is that the supply is made where the customer belongs.
Reading notice 7.41A, Para 3 & 6.3 & HMRC manuals vatposs04300 & 05100
Looks like the place of belonging and supply and business establishment is overseas. Neither there is fixed establishment as there are no employees in the UK. Therefore no VAT should be charged. Though I have a feeling I am missing a key piece of information and the auditor is correct charging VAT