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VAT services purchased from abroad

VAT services purchased from abroad

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A vendor is selling it Services from Netherlands and Zero rating the invoice to our UK company. Is it correct this invoice should be reversed charged ie. credit output vat and debit input VAT.

Another vendor is selling IT services from US and zero rating the invoice. Is it correct this invoice should be booked with a blank VAT posting ie. no debit and credit of reverse charge VAT.

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Jason Croke
By Jason Croke
24th Sep 2021 14:32

A UK business buying in services from outside of the UK, these are reverse charged.

So yes, take the value of the purchase invoice, add UK VAT and declare in Box 1 (output) and then assuming you can reclaim all your input tax, reclaimed the same value in Box 4 (input).

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Replying to Jason Croke:
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By accountingdude
24th Sep 2021 14:56

Much appreciated. Always get confused.

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By VATs-enough
25th Sep 2021 08:12

I know us VAT people get it, but why do so many others assume that reverse charge ONLY applies to services bought from the EU ?

Reverse charge has been around longer than I've been doing VAT, and yet almost every week I 'surprise' someone by telling them the services they bought from the USA need to be reverse charged.

(1999 in case you're wondering....)

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