Just a bit of background on why I am asking this....
The general rule and the place of belonging For most supplies of services, the place of supply is decided by what is known as the general rule. However, some supplies are subject to special rules that will affect their place of supply. The general rule for working out the place of supply of services, apart from those covered by special rules: You supply services to a: The place of supply is: business customer the place where the customer belongs non-business customer the place where the supplier belongs
The customer is a business, so the place of supply is where the customer belongs the US, which is outside the scope of UK VAT.
HMRC FRS guidance says
6.3 What income do I exclude from my flat rate turnover? You exclude from your flat rate turnover: private income, for example income from shares bank interest the proceeds from the sale of goods you own but which have not been used in your business any sales of gold that are covered by the VAT Act, Section 55 - see Notice 701/21 Gold non-business income and any supplies outside the scope of UK VAT, and sales of capital expenditure goods on which you have claimed input tax
So that to me says US sales need not be included, but I've read on some sites postings that accountants have advised its to be included? Are they getting it wrong??
-- Edited by FoxAccountancyServices on Friday 6th of November 2015 12:27:54 PM
I agreed with you but having seen a few posts from Accountants and something even from HMRC, which I cannot now find, goods exported are zero rated, so would supplies be. Thought I got it, now confused again.
We need Les!
__________________
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
Where the Place of Supply rules mean the supplies are made outside the UK, then they are outside the scope of UK VAT. So, General Rule B2B services are ok, but General Rule B2C services will be caught.
Notice 733, para 6.4 provides part of the answer, and refers to supplies made in the EU, but the same principle applies.
(I agree with you both on the past confusion, since the main guidance indicates that the total business turnover has to be used for the FRS calculation.)
Where the Place of Supply rules mean the supplies are made outside the UK, then they are outside the scope of UK VAT. So, General Rule B2B services are ok, but General Rule B2C services will be caught. Notice 733, para 6.4 provides part of the answer, and refers to supplies made in the EU, but the same principle applies. (I agree with you both on the past confusion, since the main guidance indicates that the total business turnover has to be used for the FRS calculation.)
Les is truly our VAT hero hey Michelle.
Thanks Les.
__________________
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
Where the Place of Supply rules mean the supplies are made outside the UK, then they are outside the scope of UK VAT. So, General Rule B2B services are ok, but General Rule B2C services will be caught. Notice 733, para 6.4 provides part of the answer, and refers to supplies made in the EU, but the same principle applies. (I agree with you both on the past confusion, since the main guidance indicates that the total business turnover has to be used for the FRS calculation.)
I think first of all we need to separate supply of goods from supply of services.
The rules, B2B and B2C, you are referring to apply only to services.
Supples of services can be outside the scope of UK VAT or zero rated if they are related to export of goods.
The rules are too complicated to quote all here, so it would be easier to consider something more specific.
The rules for place of supply of goods are covered in s7 of VATA 1994, whereas the rules for place of supply of services are found in s7a of the same act.
With regards to the original question whether the sales to USA should be included in the FRS turnover, if we assume that the supply in question is a supply of goods, I would say yes, on the basis of the VAT notice 733 para 6.2.
-- Edited by JulieS on Saturday 21st of November 2015 01:13:25 PM
