VAT on overseas invoice

Rebecca H · Feb 13, 2009

Hi everybody,

I have a teasing question for you accountant boffins out there.

I am setting up a small consultancy biz in the UK. One of my customers will be an overseas NON-EU company contracting me to provide consultancy services for a company operating in the UK. I will invoice the overseas company for these services and be paid in foreign exchange and have to convert back to GBP. The overseas company will then separately invoice the UK based company that is receiving my end product.

Normally, for consultancy services to Non-EU countries, I understand I should NOT charge VAT as the transaction is outside the scope of VAT. I am sure this is correct (and I've read the 741 VAT guidance note) - does anybody disagree with this? Does the fact the end user of the consultancy is in the UK change this reading?

Thanks!
RebeccaH

Rebecca H · Feb 15, 2009

Anybody have any ideas on this one? I know it may be tricky!

Thanks!
Rebecca H

barringtonfreight · Feb 15, 2009

We invoice many non EU customers and dont add VAT so you are correct in my opinion. Check it with your accountant though.

Who your customer is invoicing, or where is irrelevant.

David Griffiths · Feb 15, 2009

This is one for the VAT specialists, and if you expect an instant answer on a weekend, I think a little more patience is required.

The answer will be found somewhere in the place of supply rules. I don't know the answer, but I suspect that as you are delivering the service within the UK, then the supply may be made here and therefore standard rated. I wouldn't give a definitive answer on this to one of my clients, and if you are going to take advice from an internet forum, how do you know the qualifications of the respondent and accuracy of the information?

Rebecca H · Feb 15, 2009

Should I write to the Inland Revenue and get an opinion then?
Thks!
Rebecca

sheelagh · Feb 15, 2009

I agree with David G. Place of supply rules should be considered and if the the service is deemed to be carried out in the UK, you might have to account for VAT, depending on the nature of the service. It sounds as if you have already attempted to negotiate the complexities of place of supply rules so you will understand why it is important to present all the facts to your advisor.
It is unlikely that a letter to HMRC will give you a definitive answer - they are more likely to just refer you back to the relevant guidance - ie Notice 741, so you can interpret it according to the individual circumstances.
For this reason, I would also agree with David's advice to seek the opinion of VAT specialist - ask your accountant to recommend someone or find out if there is someone suitably qualified within their practice.

RAL · Feb 16, 2009

Isn't it same question you asked on taxationweb.co.uk?

http://www.taxationweb.co.uk/forum/post92189.html#p92189

Search

Search

VAT on overseas invoice

Rebecca H

Rebecca H

barringtonfreight

David Griffiths

Rebecca H

sheelagh

RAL

Similar threads

Latest Articles