Is this Irish setup legal?

[Click2Post.co.uk]

Here is a scenario, I've tried to simplify it as much as possible, could anyone lend their thoughts?

No trolling please, this is not a dodgy tax arrangement, it is solely to satisfy the rules imposed by the UK Services Company who will only invoice companies in Ireland with a Irish VAT No.

There are 3 companies in this scenario:
1) Irish 'Shell' Company (VAT Registered in Ireland)
2) UK Company (VAT Registered in UK)
3) UK Services Company (VAT Registered in UK)

The Irish 'Shell' Company is invoiced, in Euro's, by a UK Services Company using the Reverse Charge Scheme, for services that took place solely in the UK.
The UK Company that benefited from those services has the same directors as the Irish 'Shell' Company.

What would then happen is:
1) The UK Services Company will invoice the Irish 'Shell' Company 1,000 euro's per month.
2) The Irish 'Shell' Company will invoice the UK Company 1,000 euro's per month.
3) The Irish 'Shell' Company can then pay the UK Services Company using that money
I suppose you could say, the Irish 'Shell' Company is reselling the UK Services Companies services to the UK Company.

This is because the Services Company will only issue invoices to Irish companies, with an Irish VAT Number (internal issue, they can't be seen to be selling this service to a UK Company)

Should I have any concerns over the Reverse Charge Scheme with this setup?

 

[GraemeL]

Head spinning! See:-
http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14300.htm

 

[ethical PR]

Have you got an accountant...they would be best placed to advise you on this. If not perhaps get a one off consultation with an account with experience of UK and Irish tax systems.

 

[Gecko001]

I am not a VAT expert with regard to the "reverse charge scheme", so I cannot help you there, but wouldn't it be simpler just to get the UK Services Co. to invoice the Irish Services Company and then when they get paid, send the money to the UK Company. There will be a currency exchange somewhere, but that will have to happen anyway, won't it?