Tax & Accounting News

VAT Update: Overseas Sales

13/03/2009

If you provide certain services to overseas customers, it may not be necessary to charge VAT.

The rules governing these services are quite complex and are linked to the place of supply. For goods, the place of supply is where the customer took delivery of them, for services, there are various rules, depending on location, the service provided and where you are registered.

As a rule of thumb, you don’t need to charge VAT if your overseas client is:

• in business and based in another European Union (EU) country
• or is based outside the EU, whether they are in business or not.

If you do supply services to an EU business, record their VAT number or its equivalent on your invoice to show to HM Revenue & Customs (HMRC) if they query why you have not charged VAT.

Not all services escape VAT, even if provided to EU customers. HMRC have a list of services which attract VAT and for further guidance is available at www.hmrc.gov.uk/vat/int-serv-abroad.htm#1

If you would like further information on this or any other aspect of VAT, please contact us.

 

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