Question about charging VAT for services outside the UK

[sambarnes]

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Hi all,

This is my first post but I frequently browse the site and have found it to be very helpful.

On to my question:

I am newly registered as Self-Employed. I will not at this point go over the current VAT threshold so have not registered for VAT.

One of my clients is a company in the USA and I maintain and provide technical support for their online servers and websites. They have servers and sites in both the USA and the Netherlands which I manage.

Now my question is if I need to put their US tax number on my invoices and charge them VAT? From my research I don't think I do as the company is based in the USA. This is from the HMRC website and seems to be relevant (paraphrased):

Where the supplier belongs in the UK and the customer belongs outside the EC and receives a Business-2-Business supply of services: UK VAT position is that if the services are not used and enjoyed in the EC the services are outside the scope of UK and EC VAT.

Where the supplier belongs in the UK and the customer belongs in another Member State and receives a Business-2-Business supply of services: UK VAT position is that services are supplied in the other Member State and are outside the scope of UK VAT.

Where the supplier belongs in the UK and the customer belongs outside the EC and receives a Business-2-Customer supply of services: UK VAT position is that services are supplied outside the EC and outside the scope of UK (and EC) VAT.

The general rule for working out the place of supply of services:
You supply services to business customer: The place of supply is the place where the customer belongs
You supply services to non-business customer: The place of supply is the place where the supplier belongs

If the place of supply of your service is not in the EU, then your supply of services is outside the scope of VAT. You don't have to charge EU VAT or include the sale on your VAT Return.

However, as I stated earlier this company does have servers in the EC and I manage them but again, that doesn't seem like it should be an issue.

So I just want to make sure that I am correct in assuming that I do NOT need to charge VAT?

Another question is do I need to zero-rate the VAT? I can't find the link at the moment but there was something on the HMRC site about putting the company's tax number on the invoice and specifically adding something like the following to the invoice:
Subtotal: £100
VAT 0%: £0
Total: £100
It didn't seem like it was necessary in my case but again I just wanted to make sure.

I hope this is clear. Please let me know if anything needs further explanation.

Thank you in advance for any help and advice you can provide.

Emmanuel

[john-pp]

Why not just call HMRC and ask them?

They have a dedicated VAT helpline: 0845 010 9000

[sambarnes]

I should have mentioned that I did call HMRC but I couldn't get anyone that seemed to know what they were talking about. They kept referring me to their site and the same documentation that I had read over.

I'm pretty sure this isn't an issue for me but I just want to make sure as I don't want it coming back to me in the future.

[hrbs]

Hi all,

I am newly registered as Self-Employed. I will not at this point go over the current VAT threshold so have not registered for VAT.


my question is if I need to put their US tax number on my invoices and charge them VAT?

You cannot charge VAT if you are not VAT registered.

For registration purposes, under the current place of supply rules for B2B services, the customer is not in UK and therefore out of scope for UK VAT purposes.

The supply is not taken into account when making your rolling 12 monthly VATable supplies calculation and comparing the rolling 12 months total with the VAT registration threshold (currently £70k).

Regards

Keith

[sambarnes]

Perfect. Thank you for the confirmation!