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Post Info TOPIC: Another VAT invoice to Guernsey question.


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Another VAT invoice to Guernsey question.
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Can't seem to find a definitive answer to this one.

We have invoiced a new customer based in Guernsey for labour supply on work carried out in Guernsey.

The customer is stating that they won't pay the VAT, as Guernsey is a VAT exempt area.

The type of work doesn't fall under the "exempt" types that I can find definitions of, ie property etc.

Should I charge VAT or not?

TIA, Mark 



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Hi Mark,

I've not had any dealings with VAT in the Channel Islands but found this:-

VAT on services

UK VAT may need to be charged on services performed in the Islands or to clients based in the Islands, depending on the nature of the service supplied. This is a complex area, but broadly, assuming the supplier belongs in the UK and the customer belongs in Jersey, UK VAT will need to be charged on most services unless one of the following exceptions applies:

  • UK VAT does not need to be charged on most services relating to land or property situated in Jersey. This includes estate agency, conveyancing, architects, surveying, construction, property maintenance, hotel accommodation, defined exhibition stands, and property management services.
  • UK VAT does not need to be charged on most services related to a live event or physical activity carried out in Jersey. This includes cultural, artistic, sporting, scientific, educational, training, entertainment, exhibition and valuation services.
  • UK VAT does not need to be charged on passenger transport carried out in Jersey.
  • UK VAT does not need to be charged on most intellectual or intangible services supplied to a customer who belongs in Jersey. This includes copyright, royalties, licences, advertising, consultants, engineers, lawyers, accountants, banking and insurance. If the service relates to land or property situated in the UK, VAT still needs to be charged.

There are special rules for hired goods (section 13 of VAT Notice 741) and telecommunications (section 14 of VAT Notice 741).

With all these services, it is important to look at the precise nature of the underlying service being provided. A business cannot turn one type of service into another simply by changing the description on the invoice.

 

If as you say the work doesn't come under the "exceptions" then I would say you have to charge VAT, but personally I would phone HMRC for advice...as said above it is "a complex area".



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