VAT on services to EU based client after Dec 31st

[Craig@Clarity]

The rules haven't changed for the supply of professional services outside the UK - these are still outside the scope of UK VAT. If the EC Sales List requirement for B2B EU supplies has gone then that would appear to be the only notable difference, in terms of paperwork.

Place of supply of services (VAT Notice 741A) - GOV.UK

Agreed. Post Brexit, services to the EU is treated the same as the current rules for countries outside the UK i.e. outside the scope of VAT.

[TheCyclingProgrammer]

Do we have more clarity on this subject now ?
EC Sales List is gone, what about place of supply rules - was there any change, still no VAT on supplying services to EU customers ? Not clear from HMRC website if it has changed for B2B.

The rules haven't changed for the supply of professional services outside the UK - these are still outside the scope of UK VAT. If the EC Sales List requirement for B2B EU supplies has gone then that would appear to be the only notable difference, in terms of paperwork.

Place of supply of services (VAT Notice 741A) - GOV.UK

[Lumiere]

Do we have more clarity on this subject now ?
EC Sales List is gone, what about place of supply rules - was there any change, still no VAT on supplying services to EU customers ? Not clear from HMRC website if it has changed for B2B.

[eek]

No, because the place of supply is the USA which puts it outside the scope of both UK and EU VAT.

In your scenario the place of supply would be the client's location within the EU, putting it outside the scope of UK VAT but inside the scope of EU VAT (but the client deals with this under the reverse charge rules anyway).

The only difference after the transition ends is that the UK VAT regime will be entirely separate from the EU VAT regime but there will probably be some kind of continuity agreement in place to maintain the existing rules regarding place of supply rules and cross-border VAT.

If you're hoping to find a definitive answer in black and white, I think you might struggle.

That word probably is carrying a lot of weight given the apparent state of negotiations...

[TheCyclingProgrammer]

So if you sell a service now to let's say the USA no one, neither you nor the client has to add VAT?

No, because the place of supply is the USA which puts it outside the scope of both UK and EU VAT.

In your scenario the place of supply would be the client's location within the EU, putting it outside the scope of UK VAT but inside the scope of EU VAT (but the client deals with this under the reverse charge rules anyway).

The only difference after the transition ends is that the UK VAT regime will be entirely separate from the EU VAT regime but there will probably be some kind of continuity agreement in place to maintain the existing rules regarding place of supply rules and cross-border VAT.

If you're hoping to find a definitive answer in black and white, I think you might struggle.

[TheCyclingProgrammer]

Best guess right now is that things will remain the same.

From your clients perspective, its no different for them receiving services from you in the UK as it would be from any other country outside the EU - the place of supply is where the client belongs and is therefore subject to VAT under the reverse charge system. As the client accounts for the VAT at their end, you should not charge VAT.

[MasterBait]

In practice I doubt much will change.

Currently if it's a B2B sale to a client inside the EU, you don't charge UK VAT.

Currently if it's a B2B sale to a client outside the EU, you don't charge UK VAT.

Therefore seems likely that irrespective of whether we end up with some kind of deal that means VAT is similar to it is now, or no deal which makes selling to the EU more like selling to the rest of the world now, then either way you won't be charging UK VAT.

However, worth keeping an eye on how Brexit pans out, as who knows, could be some really weird/daft consequences not yet anticipated.

So if you sell a service now to let's say the USA no one, neither you nor the client has to add VAT?

[eek]

Ah. I scanned the page initially before sharing, and just rescanned it and it took a few attempts to see the big bold statement at the very top

The replacement links are pretty much useless.

HWMBO did observe the other week that HMG have completely missed in negotiations that the UK is a service industry, not a manufacturing one. It'll be interesting to see what happens...

Take the worst case scenario as a starting point and then think about every way it's possible to make it worse.

That

[ladymuck]

This guidance was withdrawn on 21 October 2019

Ah. I scanned the page initially before sharing, and just rescanned it and it took a few attempts to see the big bold statement at the very top

The replacement links are pretty much useless.

HWMBO did observe the other week that HMG have completely missed in negotiations that the UK is a service industry, not a manufacturing one. It'll be interesting to see what happens...

[Maslins]

In practice I doubt much will change.

Currently if it's a B2B sale to a client inside the EU, you don't charge UK VAT.

Currently if it's a B2B sale to a client outside the EU, you don't charge UK VAT.

Therefore seems likely that irrespective of whether we end up with some kind of deal that means VAT is similar to it is now, or no deal which makes selling to the EU more like selling to the rest of the world now, then either way you won't be charging UK VAT.

However, worth keeping an eye on how Brexit pans out, as who knows, could be some really weird/daft consequences not yet anticipated.

[eek]

I haven't read it, but is this of any use?

[Withdrawn] Providing services including those of a qualified professional after Brexit - GOV.UK


And there's an email address for enquiries: [email protected]

This guidance was withdrawn on 21 October 2019

[ladymuck]

I haven't read it, but is this of any use?

[Withdrawn] Providing services including those of a qualified professional after Brexit - GOV.UK


And there's an email address for enquiries: [email protected]

[eek]

I've got a contract for work with a EU based company starting in the New Year.
As the EU transition period will be over, I was wondering how this is going to impact VAT
I asked my accountant (SJD) they don't have a clue and answered it will not change, but I seriously doubt that.
gov.uk website has a lot about goods, but can't find anything about services and how the VAT should be calculated on that for both supplier and customer

I will be UK based with some travel to other EU countries

Truthly answer - we don't have a clue and nor does HMRC...

[MasterBait]

I've got a contract for work with a EU based company starting in the New Year.
As the EU transition period will be over, I was wondering how this is going to impact VAT
I asked my accountant (SJD) they don't have a clue and answered it will not change, but I seriously doubt that.
gov.uk website has a lot about goods, but can't find anything about services and how the VAT should be calculated on that for both supplier and customer

I will be UK based with some travel to other EU countries