Taxation VAT

Question posted by Anne Lester, on behalf of EUCCUK in WS9

As a financial service, being credit control, I charge no V.A.T. to EC countries. I am currently looking towards trade with China and South Korea for examples. Does the policy differ for such countries?

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Pete West, on behalf of Department for International Trade in Birmingham.

My understanding is that if you are supplying "services" then the VAT question depends on the 'place of supply' as outlined by HMRC in Public Notice 741a section 2.2......This link to HMRC may help to explain http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_029955&propertyType=document#P43_6089

2.2 What does 'place of supply' mean for UK suppliers?

If the place of supply of your services is the UK, you must charge any UK VAT due and account for it to HMRC regardless of where your customer belongs. If the place of supply of your services is another Member State, you or your customer may be liable to account for any VAT due to the tax authorities of that country. See paragraph 2.16.

Where the place of supply of your services is outside the UK, you should ensure that your records contain sufficient factual evidence that this is the case. See paragraph 2.7.

hope this helps

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Jas Rayatt , on behalf of Solution to Market in NG9.

Hi Dawn,

Pete West is spot on.. for the VAT. We have done some work in the Middle East. If you need a contact who can help with the paper work for the export let me know. You will need certificate of origin, this needs to approve by Dubai embassy and this is additional cost.

Jas

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Anne Lester, on behalf of EUCCUK in WS9.

I am not exporting, except money < promptly :) to creditors, as a middle-man so to speak, so to a degree, the V.A.T. is already paid between traders.

Credit Control is classed as a book-keeping service, if I recall my conversation with HMRC correctly and I charge no V.A.T. to E.C. countries. It is the overseas client's responsibility to sort this out with their own government I was categorically told by HMRC.

I still need firm answers in respect of other, non E.C. countries. I feel another conversation with the V.A.T. man coming on.

Many thanks for all input and I continue to welcome any further comments and experience.

Anne
EUCCUK
Credit Control and Customer Relations Service

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Anne Lester, on behalf of EUCCUK in WS9.

HMRC Videos

VAT inside the EU

http://www.youtube.com/watch?v=RKvongwAJYE&list=UUX03s8aGilPqvp992meZd6w

VAT outside the EU

http://www.youtube.com/watch?v=zxYyvO2pT5Q&feature=share&list=UUX03s8aGilPqvp992meZd6w

Not that this answers the question of financial services/book-keeping, but I find HMRC very helpful (eventually). :)

I was told that if my business customer is not in the UK, then I need charge no VAT., but if the business customer has an office in the UK, then I do.

Best wishes to all

Anne Lester
EUCCUK
Credit Control and Customer Relations Service

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