VAT Question

[Robot]

I'm a UK (one man) Ltd Company currently providing services to a Norwegian based company (where the project is being run from), however I'm not based in Norway as the work is in the UK at one of the Norwegians UK suppliers.

The agent that contacted me regarding the above position and to whom I submit timesheets & Invoices is based in Houston, Texas. I've e-mailed the agent on a couple of occasions regarding the addition of VAT as I wanted to be sure that they understood my obligation to pay HMRC and have received no reply.

I submitted my first invoice last December with 15% VAT on top but I have a gut feeling that they'll pay the agreed day rate x the number of days invoiced for and disregard the VAT and expect me to pay it myself.

Considering the above, have any of you found yourselves in a similar situation? What advice would you offer given the worst case scenario with this agent?

Thanks Bolshevik.

Bolshevik

Is your company registered for the VAT flat rate scheme? IF yes, and you do not charge VAT on your sales invoice, then I suggest you get off the VAT Flat Rate Scheme, pronto.

[ASB]

Exporting only applies to goods. For services its the place of supply that is relevant. As the place of supply is in the UK, you will have to charge VAT and the customer / agency will be obliged to pay it.

It can be reclaimed by them though, IIRC.

Just because the work is actually done in the UK does not necessarily make the place of supply the UK. It depends on the type of services being provided, some will default to the place of supply being the home country of the customer - irrespective of where the work is actually performed. But, where the customer (or anybody in the supply chain potentially) has a branch in the UK then the place of supply MAY be the UK if the work is physically performed in the UK.

As I said earlier vat probably should not be charged, but it does depend on the entire circumstance and the OP does not give enough information to be sure. Additionally the actual customer is NON UK which may mean it is outside the scope of VAT anyway, but it is possible that for VAT purposes the noweigan entity is in fact the customer - that depends on the exact details of the the contracts and whether the OP falls within the rules for agency supplied staff.

Wonder if this is a good time to mention US sales tax There are some pretty weird rules surrounding that when services are supplied - it is very unlikely that sales tax should be charged though the Texan outfit may potentially have to reverse charge it to themselves.

[Alan @ BroomeAffinity]

Essentially the work is being "exported" to Norway which is outside the EU therefore no VAT is due.

Exporting only applies to goods. For services its the place of supply that is relevant. As the place of supply is in the UK, you will have to charge VAT and the customer / agency will be obliged to pay it.

It can be reclaimed by them though, IIRC.

[ASB]

VAT should **probably** not be charged, however it can depend on who has branches in the UK. Look on HMRC and check "place of supply" - this governs what happens and it's a bit of a minefield in some cases.
Search for place of supply on this board as well. This question has been asked a number of times in various guises, the answer depends upon the exact circumstance. The VAT man won't tell you. He will only give an opinion which does not have force of law (but is generally regard as a good defence - if you get it in writing - in an investigation).

[Platypus]

Essentially the work is being "exported" to Norway which is outside the EU therefore no VAT is due.

[BrilloPad]

What does your contract say?

[SueEllen]

I'm sure you don't pay VAT.

Ring the VAT office and ask them. They are actually very helpful when answering enquiries.

[Bolshevik]

I'm a UK (one man) Ltd Company currently providing services to a Norwegian based company (where the project is being run from), however I'm not based in Norway as the work is in the UK at one of the Norwegians UK suppliers.

The agent that contacted me regarding the above position and to whom I submit timesheets & Invoices is based in Houston, Texas. I've e-mailed the agent on a couple of occasions regarding the addition of VAT as I wanted to be sure that they understood my obligation to pay HMRC and have received no reply.

I submitted my first invoice last December with 15% VAT on top but I have a gut feeling that they'll pay the agreed day rate x the number of days invoiced for and disregard the VAT and expect me to pay it myself.

Considering the above, have any of you found yourselves in a similar situation? What advice would you offer given the worst case scenario with this agent?

Thanks Bolshevik.