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    Default VAT on services to Gibraltar client

    MyCo is VAT registered in the UK. My understanding is that if MyCo did work (provide a service) for a business client in, say, Belgium, then VAT would arise for MyCo in Belgium rather than UK. Not sure if this is right?

    Gibraltar does not have VAT. Adding VAT at 20% would make my services very expensive for them, but I am not even sure if that is necessary. So what is the best way forward? Seems to me the easiest thing would be to set up MyCo2 and not register it for VAT, so not charge VAT (it's very unlikely that annual income levels would require VAT registration). Any advice form someone who has done it (e.g. worked for a Gibraltar client using YourCo (UK) Ltd)?

    MyCo's accountants say "it's complicated"...

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    Default VAT on services to Gibraltar client

    I don't think it is complicated. The place of supply is outside the eu so outside the scope of VAT. No need to charge, or reference, VAT.

  3. #3

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    Quote Originally Posted by Syntyrion View Post
    MyCo is VAT registered in the UK. My understanding is that if MyCo did work (provide a service) for a business client in, say, Belgium, then VAT would arise for MyCo in Belgium rather than UK. Not sure if this is right?

    Gibraltar does not have VAT. Adding VAT at 20% would make my services very expensive for them, but I am not even sure if that is necessary. So what is the best way forward? Seems to me the easiest thing would be to set up MyCo2 and not register it for VAT, so not charge VAT (it's very unlikely that annual income levels would require VAT registration). Any advice form someone who has done it (e.g. worked for a Gibraltar client using YourCo (UK) Ltd)?

    MyCo's accountants say "it's complicated"...
    Where are you providing the service to the client i.e. will you be in the UK or Gibraltar? If you will be in Gibraltar then you should not charge VAT on your invoices. If you are in the UK and provide the services to Gibraltar from there then it gets more complicated and you should seek specialist tax advice.

    I had a similar problem earlier in the year with an Alderney based clientco that has a similar tax arrangement but was working from their offices in the UK and had to seek advice.

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    Quote Originally Posted by redgiant View Post
    Where are you providing the service to the client i.e. will you be in the UK or Gibraltar? If you will be in Gibraltar then you should not charge VAT on your invoices. If you are in the UK and provide the services to Gibraltar from there then it gets more complicated and you should seek specialist tax advice.

    I had a similar problem earlier in the year with an Alderney based clientco that has a similar tax arrangement but was working from their offices in the UK and had to seek advice.
    If OP is working from the UK it still isn't that complicated UNLESS the Gibraltar company has some kind of UK presence, e.g. offices that OP is working from.

    If OP is just working from home or their own office, then the place of supply is quite simply, outside the UK and outside the scope of UK VAT.

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    I will mostly be in the UK, though there will likely be some visits to Gibraltar. Gibraltar is a funny one - it is "in" the EU but not a member as such, and doesn't charge VAT.

    I know I should technically get specialist advice but that's not cheap so is there any reason not to create MyCo2 and do the work as non-VAT-registered co.?

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    sal
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    Quote Originally Posted by Syntyrion View Post
    I know I should technically get specialist advice but that's not cheap so is there any reason not to create MyCo2 and do the work as non-VAT-registered co.?
    You think that running MyCo2 will be cheaper than the specialist advice? Even if you opt not to pay for accountant the administrative overhead will far out weight the cost of specialist tax advice.

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    Quote Originally Posted by Syntyrion View Post
    I will mostly be in the UK, though there will likely be some visits to Gibraltar. Gibraltar is a funny one - it is "in" the EU but not a member as such, and doesn't charge VAT.

    I know I should technically get specialist advice but that's not cheap so is there any reason not to create MyCo2 and do the work as non-VAT-registered co.?
    You don't need to charge VAT. A B2B supply of services like ours to outside the UK is outside the scope of UK VAT. For clients based in the EU, they should be applying the reverse charge to your supplies. Not sure if this applies in Gibraltar but it's not your problem.

    If you want confirmation of this, give the VAT man a call. Also read HMRCs guide to place of supply rules.

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