My client is VAT registered in the UK and is invoicing their customer for expenses incurred whilst working in France. The business in France is VAT registered too.
Should my client charge VAT on their expenses or should they raise the invoice without VAT and state that it is subject to the reverse charge?
Edit - Or, do they invoice their client the net value and then reclaim the VAT from HMRC?
Thanks in adance :)
Jon
-- Edited by Jon Lewis on Wednesday 4th of February 2015 11:13:49 AM
-- Edited by Jon Lewis on Wednesday 4th of February 2015 11:27:45 AM
Reverse charge is for electronic services and so I think reverse charge isn't applicable. However, every business in the EU has a VAT number and if your client obtains that, they can invoice the EU client without charging VAT. EC sales list then needs to be prepared.
No doubt the amazing Les Howard will be along soon, to confirm or deny :0)
-- Edited by FoxAccountancyServices on Wednesday 4th of February 2015 07:40:39 PM
Reverse charge is for electronic services and so I think reverse charge isn't applicable. However, every business in the EU has a VAT number and if your client obtains that, they can invoice the EU client without charging VAT. EC sales list then needs to be prepared.
No doubt the amazing Les Howard will be along soon, to confirm or deny :0)
-- Edited by FoxAccountancyServices on Wednesday 4th of February 2015 07:40:39 PM
Hi
thought it was all services, but subject to certain rules eg where services performed (specifically important in eg broadcasting and sporting type events), VAT notice 741a. For reverse charge I always do as Michelle suggests and get their VAT number, verify this via VEIS service (link to follow) and include this and 'subject to reverse charge' on invoice. It's number 3 ie services on EC sales list.
Not seen Les for a while!! Hope you're ok.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
this is what confuses me about reverse charge... Everything reads about services coming into the UK
Section 18 of notice 741 has a reverse charge section...
"You will need to refer to this section if you belong, or are VAT registered, in the UK and receive the following types of services from an overseas supplier"
The reverse charge I am thinking of, not to be confused with carousel fraud, is in section 17.1
"Normally, electronically supplied services supplied in a Member State will be taxable at the standard rate established by a Member State in accordance with Articles 97-98(2) of the Principal VAT Directive (formerly Article 12(3)(a) of the VAT Sixth Directive), unless an exempting provision in a Member State applies"
I think that's where my understanding of normal services to VAT reg EU business - zero rate and EC sales - comes from.
But I have no clients that do normal services, only goods and electronic! So I've not looked into the fine print!
Just when I think I've got my head round it, I lose it again! :))
Hi Its all confusing and HMRC deliberately right it so you can read it in three different ways and have to look at 5 different notices or sections to put it all together.
17.1 - you say is referring to electronically supplied (which is MOSS methinks). My knowledge comes from services - but with the broadcasting angle (so its one of the odd ones!) and the place of supply rules are key for if its reverse charge or zero rates. I reverse charge to various countries for one client who is on the telly. I have the VAT rules somewhere but for the life of me cant remember which safe place I put them. (I will try to find them!). Although at the time I tied myself in knots over them and I seem to recall I phoned HMRC. (In addition - Ive had the process confirmed by a big TV station over in Ireland as they also told me what to put on my invoices)
Here are the important place of supply rules - just found these https://www.gov.uk/vat-how-to-work-out-your-place-of-supply-of-services
Re Jon's post - guess it might help him if we know what type of services, given this is a minefield especially now with MOSS.
Wake up Les too!
-- Edited by Cheshire on Thursday 5th of February 2015 07:59:32 AM
-- Edited by Cheshire on Thursday 5th of February 2015 08:05:06 AM
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi What its goes back to then is what services are you invoicing for in the first place that you need to add expenses on to - think thats key to start with, then cover off the place of supply.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Bit of a minefield really isn't it?
The exact expenses they are invoicing their client for are accommodation & subsistence.
