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HMRC internal manual

VAT Place of Supply of Services

From
HM Revenue & Customs
Updated
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Introduction: Background to the rules

The scope of VAT is defined in Section 4 of the VAT Act 1994

4(1) VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him

(2) A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply.

For VAT purposes, the country where a supply is deemed to be made is called the ‘place of supply’ and is the place where it is liable to VAT, if any. There are various place of supply rules applicable to services of different kinds are deemed to be supplied. These rules are necessary to ensure that VAT, where payable, is paid only in the correct country and to avoid the possibility of supplies being taxed more than once or not at all.

Where the place of supply of a service is in another Member State of the EC, that supply is outside the scope of UK VAT and is liable to the VAT rules in that Member State and in no other country. If the place of supply of a service is outside the EC, that supply is described as outside the scope of VAT altogether and is therefore not liable to VAT in any Member State.