You can call the VAT helpline, as they are typically very helpful. See here also (notably line 5 in the table).
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UK Contractor working with a US agency on a UK based assignment - advice needed
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Originally posted by javadude View PostWorth asking your accountant too. When I phoned HMRC about a VAT question with respect to working for a client in Greece the answer they gave me was wrong and would have cost me £4,000 if I'd done what they'd said. My accountant had a better understanding and offered accurate advice.
I called the VAT helpline and, honestly speaking, it was fairly helpful but I didn't feel confident with the woman's answer. At first she was insisting that I charge 0% VAT on exported goods, but I kept trying to explain to her that I am not exporting goods, but that I am delivering services to a US-based company, who have contracted me to work with their US client who have a UK based office, where I will situated and doing consulting work across Europe and America for them.
In the end, she just told me to consult Notice 741A on the HMRC site (HM Revenue & Customs), which was not particularly helpful.
I have dealt directly with US customers before and my Accountant advise me to not charge VAT, and to state on the invoice that "this invoice may be subject to a reverse charge for VAT purposes." Difference is this time, my US customer has me working onsite for one of their customers' UK office (but the work I do for them is not constrained just to the UK). Too confused!Comment
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Bit of extra info in the above post that could be crucial.
There aren't "use and enjoyment" provisions for professional services, that's usually for things like software and digital goods.
There is a provision mentioned above for overseas clients with a UK establishment which is why it seemed like VAT might be chargeable.
However, you just said that you will be working for your US client's UK based client. I assumed you meant your US client had a London office. If this isn't a case then it doesn't sound like your US client has a UK base at all in which case the usual advice that the supply is outside the scope of UK VAT is probably the correct one.
If still be inclined to get a second opinion from your accountant and maybe the VAT helpline again though.Comment
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Originally posted by Vishy View PostOnce again, thanks to everyone for the answers to my questions. Your help is proving invaluable.
I called the VAT helpline and, honestly speaking, it was fairly helpful but I didn't feel confident with the woman's answer. At first she was insisting that I charge 0% VAT on exported goods, but I kept trying to explain to her that I am not exporting goods, but that I am delivering services to a US-based company, who have contracted me to work with their US client who have a UK based office, where I will situated and doing consulting work across Europe and America for them.
In the end, she just told me to consult Notice 741A on the HMRC site (HM Revenue & Customs), which was not particularly helpful.
I have dealt directly with US customers before and my Accountant advise me to not charge VAT, and to state on the invoice that "this invoice may be subject to a reverse charge for VAT purposes." Difference is this time, my US customer has me working onsite for one of their customers' UK office (but the work I do for them is not constrained just to the UK). Too confused!
If you invoiced the UK client directly VAT would obviously apply as the customer is in the UK.
If your work directly relates to US business' UK branch then UK VAT would apply due to the place of belonging rules (these rules kick in as there are multiple establishments); see section 3.6.1 of link:
HM Revenue & CustomsComment
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Originally posted by JB3000 View PostYou are invoicing the US business (not the US business' UK client or US business' UK branch). Consequently as the customer (the US business) is outside the UK the supply is outside the scope of UK and EC VAT. Therefore no VAT is chargeable.
If you invoiced the UK client directly VAT would obviously apply as the customer is in the UK.
If your work directly relates to US business' UK branch then UK VAT would apply due to the place of belonging rules (these rules kick in as there are multiple establishments); see section 3.6.1 of link:
HM Revenue & Customs
This is a truly wonderful forum and you were all of such great help. Thank you!Comment
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Originally posted by Vishy View PostThanks for a great answer. I believe this is the correct answer having spoken to a VAT consultancy.
This is a truly wonderful forum and you were all of such great help. Thank you!Comment
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