Do I pay VAT - place of supply (website)

[Menschik]

Morning all,

I have come across a problem with place of supply rules for VAT. I run a website in UK. The website (news) is read by people all over the world.

What happens if I am selling ad spaces to customers outside UK and EU (China)? Do I charge UK VAT? I am not sure about the place of supply and how it applies. Google Analytics shows that people literally from around the world access my website.

Also, what happens if I buy services (article/review) from freelances from EU? Do I pay VAT for them and can I get it back under reverse charge?

I am so confused by this. I spent 3 hours reading various documentation on HRMC but still for the life of me figure it out.

Any input is welcome!
Thanks,
Lukas

 

[kulture]

First question, are you registered for VAT?

 

[Menschik]

Yes, I am currently registering for VAT on voluntary basis, as my clients from EU won't work with me if I don't give them EU VAT ID.

 

[scstock]

My one and only VAT inspection picked up on a one-off case where I had supplied a service in the UK for someone in the US - they ruled that I should have charged VAT as the supply took place in the UK.

Based on that case I would say that yes, you do need to charge VAT to non-EU customers as your website is in the UK.

 

[Menschik]

Thanks, based on this, I need to charge VAT for non-EU customers.

Also, if I buy an electronic service from a supplier within EU, I also need to pay VAT to HMRC, but I should be able to reclaim it? Not sure if my understanding of this is correct, though.

 

[Scalloway]

if you buy an electronic service from a supplier within EU you pay VAT and reclaim it at the same time.

 

[Alan]

I'm a little confused

general rule says - services - "business customer - the place where the customer belongs"

So selling ad space to business customers outside the EEA, is that not out of scope of VAT?

p.s. is it the 'electronic service' element? I can only find reference to private customers not business customers?

 

[Menschik]

I am a little confused too still. Any other points of view are welcome!

 

[Menschik]

Also, still thinking wether I need to register for VAT to buy services from EU customers. I know that their legislation (Slovakia) requires self employed to register for VAT, even when they don't pay VAT on domestic transactions.