Supplying services to ROI company who is not VAT registered, but I am UK VAT reg'd.

[IntaCepta]

Good Evening boys and girls,

I hope you will be able to help me with clarifying a query I have regarding supplying services to EU member states. I have tried to search the forum but it doesn't seem to like three letter word searches (eg frs vat eu) and just haven't been having much luck in this instance.

I have a new client I will be doing some IT Consultation work for who is based in Republic of Ireland. My company is VAT registered and currently under the Flat Rate Scheme (14.5%).

My client is not registered for VAT in the ROI but is trading as a business, and I am to provide services to their business remotely (VPN) from the UK. Firstly, do I consider them as a Business or Consumer, as I would like to know where the place of supply will be (UK or ROI). Some online material suggest that since the company isn't VAT registered in their state they are essentially a consumer? However I'm inclined to believe they are a business as they are a registered company in ROI.

I will not be visiting Ireland for any works, as previously mentioned all work will be carried out remotely from the UK. I have been reading notices 733 and 741a, but am unable to determine how I treat the VAT portion of the sales.

Please can you advise on what rate VAT I must charge on the sales invoices to my client in ROI. Do I charge them the standard UK VAT 20% or the ROI VAT 23%.

If I do need to charge my client the ROI rate of 23%, do I include the total sales of this invoice in my FRS VAT returns boxes? Do I still need to fill out an ECSL even though my client is not VAT registered.

Any help with this query would be much appreciated. I haven't needed an tax advisor up until now and will be looking for one this week. But if anyone happens to know a definitive answer to my points or they would like to share any pointers I would much appreciate it.

Kind Regards
Inta

[TheCyclingProgrammer]

So long as you have sufficient evidence of their business status and are satisfied that the services are being supplied for business purposes then it is a B2B supply. You do not require a VAT number to treat this as a B2B supply of services. A VAT number is only required when zero rating goods for export. This is outlined in 6.3 of VAT notice 741a.

https://www.gov.uk/government/public...s-for-services

The place of supply is ROI and the supply is therefore outside the scope of U.K. VAT and so you should not charge any VAT.

You should mention somewhere on your invoice that the supply is to be accounted for under reverse charge rules. How that applies to them as a non-registered trader depends on Irish VAT rules but if it's the same as the UK the supply will count towards their VAT registration threshold.

Because the client is not actually VAT registered and therefore wont be accounting for the supply under the reverse charge you will not need to complete an ECSL, as explained here:

https://www.gov.uk/guidance/vat-how-...-your-eu-sales

Because the supply is outside the scope of U.K. VAT it is not included in your flat rate turnover and the supply will not be included on your VAT return at all.

[jamesbrown]

Just to add for anyone reading in future that is not on the FRS, Box 6 should include supplies that are outside of the scope of VAT in that scenario. I agree that it should not when accounting under the FRS. There is a difference between income that is outside of the scope of VAT based on the place of supply rules and income that is outside of the scope of VAT because it is not a consideration for the supply. Confusing, I know!