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Another UK VAT Question!

  • 28-01-2021 9:47am
    #1
    JMR
    Registered Users, Registered Users 2 Posts: 636 ✭✭✭


    Should an Irish company, providing services to a UK company charge VAT?
    The service is fully carried out within Ireland.

    Thanks


Comments

  • #2
    Scotty #
    Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭Scotty #


    No.

    The 'place of supply' is not where the service is carried out, it's where the paying business is established.

    https://www.revenue.ie/en/vat/vat-on-services/when-is-vat-charged-on-services/general-place-of-supply-rules-for-services.aspx
    https://www.revenue.ie/en/vat/vat-on-services/when-is-vat-charged-on-services/vat-obligations-of-Irish-traders-supplying-services-to-business-customers-abroad.aspx


  • #3
    Risteard81
    Registered Users, Registered Users 2 Posts: 2,567 ✭✭✭Risteard81


    Scotty # wrote: »
    No.

    The 'place of supply' is not where the service is carried out, it's where the paying business is established.

    https://www.revenue.ie/en/vat/vat-on-services/when-is-vat-charged-on-services/general-place-of-supply-rules-for-services.aspx
    https://www.revenue.ie/en/vat/vat-on-services/when-is-vat-charged-on-services/vat-obligations-of-Irish-traders-supplying-services-to-business-customers-abroad.aspx

    Not if the service is connected with immovable property within the State.


  • #4
    devildriver
    Registered Users, Registered Users 2 Posts: 874 ✭✭✭devildriver


    I placed an enquiry with Irish Revenue with much the same question. As an Irish VAT-registered service provider selling services to the UK (web design) what are my tax obligations?

    I got a non-committal answer that I should check the HMRC website. And while it's a lot better than the Irish Revenue site in terms of finding information I'm still confused as to whether my supply of services to businesses in the UK classifies a "digital services" - which I can see attract VAT and require me to be registered in the UK for VAT.

    Any clarification would be appreciated. Thanks.


  • #5
    Scotty #
    Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭Scotty #


    devildriver wrote: »
    II'm still confused as to whether my supply of services to businesses in the UK classifies a "digital services"
    They do, "website supply or web hosting services" are listed as Digital Services here > https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers#define-digital

    You'll need to register for VAT in the UK.


  • #6
    devildriver
    Registered Users, Registered Users 2 Posts: 874 ✭✭✭devildriver


    Scotty # wrote: »
    They do, "website supply or web hosting services" are listed as Digital Services here > https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services-to-private-consumers#define-digital

    You'll need to register for VAT in the UK.

    Thanks. Yes I saw that on the HMRC website but the heading on that page is:

    VAT rules for supplies of digital services to consumers

    I'm unsure if the same applies to B2B.

    The broad guidance on the Irish Revenue site, here under the heading....

    Supplies to business customers outside the EU (B2B)

    https://www.revenue.ie/en/vat/vat-on-services/when-is-vat-charged-on-services/vat-obligations-of-Irish-traders-supplying-services-to-business-customers-abroad.aspx

    .....suggests that in general Irish VAT is not charged. Obviously UK VAT is different.

    Hence my confusion.


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  • #7
    Scotty #
    Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭Scotty #


    I think you can do it either way...

    A. Register for VAT in the UK and charge VAT as if you were established in the UK. This is the easiest option for your customers (both B2C and B2B) but you'll have to submit quarterly returns to UK Revenue.

    B. 'Reverse charge' the VAT where by you don't charge any VAT and your customer (who must be VAT registered) accounts for it on their VAT returns. You will need to collect their VAT No. for this and make sure it's on your invoice.


  • #8
    devildriver
    Registered Users, Registered Users 2 Posts: 874 ✭✭✭devildriver


    Scotty # wrote: »
    I think you can do it either way...

    A. Register for VAT in the UK and charge VAT as if you were established in the UK. This is the easiest option for your customers (both B2C and B2B) but you'll have to submit quarterly returns to UK Revenue.

    B. 'Reverse charge' the VAT where by you don't charge any VAT and your customer (who must be VAT registered) accounts for it on their VAT returns. You will need to collect their VAT No. for this and make sure it's on your invoice.

    Thanks Scotty. I got in touch with a tax consultant in the UK and he was advising "B" - reverse charging - as the way to go. Which is pretty much as I have always done.


  • #9
    caesar
    Registered Users Posts: 747 ✭✭✭caesar


    Appreciate this one looks like it's been answered but is registering and charging UK VAT on services from your Irish company not subject to the £85,000 UK VAT threshold? (Which is some way higher than the Irish services threshold of €37,500).

    My understanding is you don't need to do anything unless your turnover in the UK is over £85k. Or at a min do you still need to do the reverse charge thing irrespective of turnover?

    I believe you could opt to register for VAT in the UK irrespective of your turnover there but I'm not sure what benefit that would give you, unless you had a large amount of costs there, and then wanted to claim the UK VAT back. Confusing, but I think with Brexit you would have to claim it back as they UK are (obviously) not in the EU Vat Mini One Stop Shop (MOSS) any more, which made business life a bit easier.

    Wondering as I'll be facing a similar set of questions on selling services into the UK.


  • #10
    louis346789
    Registered Users Posts: 324 ✭✭louis346789


    Just to check. It's my understanding that the vat reverse charge mechanism is not valid between Ireland and the UK. It's only vat within the EU.
    Perhaps I am wrong though.


  • #11
    Scotty #
    Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭Scotty #


    caesar wrote: »
    ...is registering and charging UK VAT on services from your Irish company not subject to the £85,000 UK VAT threshold?
    No, if you're not based in the UK the threshold does not apply and you must register before issuing any invoices.

    From: https://www.gov.uk/vat-registration/when-to-register

    Businesses outside the UK
    There’s no threshold if neither you nor your business is based in the UK.
    You must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days).



    By the way, this was always the case. It's not only since Brexit.


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  • #12
    Scotty #
    Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭Scotty #


    louis346789 wrote: »
    Just to check. It's my understanding that the vat reverse charge mechanism is not valid between Ireland and the UK. It's only vat within the EU.
    Perhaps I am wrong though.
    The UK are no longer part of the VIES system but they still support reverse charging.


  • #13
    Masala
    Registered Users, Registered Users 2 Posts: 3,501 ✭✭✭Masala


    louis346789 wrote: »
    Just to check. It's my understanding that the vat reverse charge mechanism is not valid between Ireland and the UK. It's only vat within the EU.
    Perhaps I am wrong though.

    I believe it still exists but now you use a EORI number.... which is usually your VAT number.

    However - you will have to get into Revenue and register for this number as it gets loaded into site that your UK suppliers can check.


  • #14
    caesar
    Registered Users Posts: 747 ✭✭✭caesar


    Scotty # wrote: »
    No, if you're not based in the UK the threshold does not apply and you must register before issuing any invoices.

    From: https://www.gov.uk/vat-registration/when-to-register

    Businesses outside the UK
    There’s no threshold if neither you nor your business is based in the UK.
    You must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days).



    By the way, this was always the case. It's not only since Brexit.

    Ace thanks for that. Ah I was in the UK before and figured it carried over. Now that I've just completed the incorporation process here, I need to get this stuff in order so I can trade freely and without causing myself problems down the line.


  • #15
    Scotty #
    Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭Scotty #


    Masala wrote: »
    I believe it still exists but now you use a EORI number.... which is usually your VAT number.
    EORI numbers only apply to the physical movement of goods. Does not apply to services.


  • #16
    Masala
    Registered Users, Registered Users 2 Posts: 3,501 ✭✭✭Masala


    Scotty # wrote: »
    EORI numbers only apply to the physical movement of goods. Does not apply to services.

    ...didn't know that!! Useful to know..


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