what rate of VAT to charge to US based client, billing in USD where work was in UK

[tolland123]

Hi,
what rate of VAT to charge to US based client, billing in USD where work was carried out in the UK (remotely via vpn etc)

Thanks
Tee

[TheCyclingProgrammer]

Depends on the nature of the work. If you are an IT contractor then there is a good chance that it is outside the scope of UK VAT and no VAT is chargeable but to be sure you will need to read the VAT place of supply rules (notice 700 I think).

The general rule is that it is outside the scope but there are provisions for where the services are used and enjoyed.

[tolland123]

Depends on the nature of the work. If you are an IT contractor then there is a good chance that it is outside the scope of UK VAT and no VAT is chargeable but to be sure you will need to read the VAT place of supply rules (notice 700 I think).

The general rule is that it is outside the scope but there are provisions for where the services are used and enjoyed.

The VAT guide was pretty helpful in getting my head around this one;
HM Revenue & Customs

In section 4.8.2;
"No UK VAT would be chargeable on supplies that take place outside the UK."

5.7 Exported services
Some supplies of services to overseas customers are zero-rated, but many are standard-rated. You will find more about this in Section 29.

7.7 Values expressed in a foreign currency
For VAT purposes, amounts of money must always be expressed in sterling.

29.1
Remember, if you incur input tax that is related to exempt supplies as well as taxable supplies, you are termed as partly exempt and you will probably not be able to claim all your input tax. See Section 13 for further information.


Notice 741
12.3 What is the place of supply of my services if my customer belongs outside the EC?
If, as a UK supplier, you supply any of the services in section 13 to any person who belongs outside the EC, that is supplies to business, non-business or private customers belonging outside the EC, your services are supplied in your customer’s country and are outside the scope of UK and EC VAT. The place of supply of your services is outside the EC.


13. Schedule 5, paragraphs 1 to 8 – Services that can be supplied or received in a customer’s country
13.5.2 What are services of consultants and consultancy bureaux?
Services of consultants and consultancy bureaux cover the normal services of experts in all professional areas who act in an accepted professional or advisory capacity.

[rmmc]

Notice 741
12.3 What is the place of supply of my services if my customer belongs outside the EC?
If, as a UK supplier, you supply any of the services in section 13 to any person who belongs outside the EC, that is supplies to business, non-business or private customers belonging outside the EC, your services are supplied in your customer’s country and are outside the scope of UK and EC VAT. The place of supply of your services is outside the EC.


13. Schedule 5, paragraphs 1 to 8 – Services that can be supplied or received in a customer’s country
13.5.2 What are services of consultants and consultancy bureaux?
Services of consultants and consultancy bureaux cover the normal services of experts in all professional areas who act in an accepted professional or advisory capacity.

I am afraid above notice is replaced by Vat Notice 741a .

[Craig@Clarity]

Hi,
what rate of VAT to charge to US based client, billing in USD where work was carried out in the UK (remotely via vpn etc)

Thanks
Tee

As your client is based in the US and assuming you are billing the US company, it is outside the scope of VAT meaning you don't have to charge your client any VAT. I would suggest invoicing for sterling but putting the USD equivalent amount at the bottom of your invoice.