A potential client is a small UK web-related services business who is not currently VAT registered because its turnover is below the UK VAT Registration threshold.
They make no sales to non-UK customers but they do purchase online services from EU and also US suppliers.
Some of the services they purchase are clearly e-services (purchase of stock images online – no human intervention) while some are not e-services (such as having a website template specifically designed by non UK designer).
I understand that reverse charges apply on B2B services received, and that where the client is not VAT registered they must still take these into account when considering the UK VAT registration thresholds, but this leads me to two questions.
- Is a transaction considered B2B for UK VAT Registration purposes if the non-UK supplier treats it as B2C? This happens a lot as client has no VAT number to supply.
- With some eservices such as software purchases from an Irish company, client has been charged UK VAT as a B2C, presumably via the supplier using the Irish version of MOSS. Again, does this need to be considered part of client turnover even though UK VAT has been charged?
If everything must be considered B2B, does this mean that a client with 12-month UK sales of, say, £60k but who purchases services in the same period totalling more £24k from non-UK suppliers would now have to register for UK VAT?