VAT on invoice from a US web hosting company

[concord]

I have a recurring web hosting expense and I'm trying to figure out which tax rate to apply. My accountant said there's no VAT but I just received the invoice and there are some factors that I've outlined below that I'd like to consider.

The company is US based and charges in US dollars but it asked me to input the VAT registration number of my business. If you don't enter this in, VAT is added to the invoice (ie BC2 means VAT is added to the invoice).

The company has an EU VAT number that starts with "EU" and they say that they are registered under the Electronically Supplied Services scheme. The VPS is hosted in a UK data centre.

The hosting company says that despite VAT not being on the receipt, the business might need to manually account for it.

Does anyone know how to handle this expense? I do have an accountant but at the moment I handle my own VAT through an app.

Thanks.

[concord]

I've done a bit more research and it looks like I've found an answer in the HMRC Internal Manual.

Example 1 is basically the exact same situation and it says I will need to apply a "reverse charge".

I'll also need to convert the USD to GBP using the rates here: https://www.gov.uk/government/collec...ustoms-and-vat.

[TheCyclingProgrammer]

Yes you will need to account for this under the reverse charge. It's fairly simple and is VAT neutral even if you're on the FRS.

[Chart Accountancy]

Does anyone know how to handle this expense? I do have an accountant but at the moment I handle my own VAT through an app.

Thanks.

If your app is approved by HMRC for VAT, you should be able to mark the expense under the reverse charge in there. If not, you will need ask your account to assist you to include a manual adjustment when submitting your VAT return as follow for services:

Box 1 (output VAT)

Box 4 (input VAT)

Box 6 (value of the deemed supply)

Box 7 (purchase value)