- Original Poster
- #1
Hi ,
We are receiving conflicting advice on whether to charge VAT or not so I am hoping that one (or more!) of accounting professionals on the forum might be able to help and shed some more light on this.
Scenario:
UK company A supplies consultancy services to another UK company B
UK company B re-sells these services and supplies them to company C which is based in the EU.
There is no direct contractual relationship between Company A and C, however a member of the Company As staff works on the Company C's site in the EU, hence place of supply and consumption is in the EU.
All companies are VAT registered, all transactions/invoices are in Euro.
When Company B invoices Company C, the VAT is out of scope of UK VAT hence Company B does not charge VAT to Company C.
The question is:
Should Company A charge the UK VAT to Company B or not?
Two possible answers we are getting are:
(1) Yes, because both companies A and B are UK companies and there is no direct relationship between companies A and C.
(2) No, because the place of supply is in the EU, hence VAT is 'out of UK VAT scope' also for invoices between companies A and B.
Which one is right?
Thank you,
Milan
We are receiving conflicting advice on whether to charge VAT or not so I am hoping that one (or more!) of accounting professionals on the forum might be able to help and shed some more light on this.
Scenario:
UK company A supplies consultancy services to another UK company B
UK company B re-sells these services and supplies them to company C which is based in the EU.
There is no direct contractual relationship between Company A and C, however a member of the Company As staff works on the Company C's site in the EU, hence place of supply and consumption is in the EU.
All companies are VAT registered, all transactions/invoices are in Euro.
When Company B invoices Company C, the VAT is out of scope of UK VAT hence Company B does not charge VAT to Company C.
The question is:
Should Company A charge the UK VAT to Company B or not?
Two possible answers we are getting are:
(1) Yes, because both companies A and B are UK companies and there is no direct relationship between companies A and C.
(2) No, because the place of supply is in the EU, hence VAT is 'out of UK VAT scope' also for invoices between companies A and B.
Which one is right?
Thank you,
Milan
