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HMRC internal manual

VAT Place of Supply of Services

General rule: Examples

A UK supplier provides administrative services to a customer in France. The customer provides a valid French registration number. The supply is therefore being made B2B and so the general rule says that the place of supply is where the recipient belongs. As this is France, the supply is outside of the scope of UK VAT.

A UK lawyer provides legal advice to a non-business customer in Spain. As the supply is B2C, the general rule is that the place of supply is where the supplier belongs. The lawyer resides in the UK and so the service is within the scope of UK VAT.

A consultant in the UK provides advisory services to an Italian trade organization, which is a limited company. The customer is unable to provide a VAT number or any other supporting documentation to show that it is a relevant business person for VAT purposes. The consultant should therefore consider that this is a B2C supply. The general rule for B2C services is that the place of supply is where the supplier belongs. The consultant should charge UK VAT.

A Danish company provides advertising to a UK based charity. The adverts are clearly geared to the charity’s fund raising activities. The charity is VAT registered due to income from its shops. Although fund raising is a non-business activity, the charity is always considered to be a relevant business person because it is VAT registered. The place of supply is therefore where the customer belongs, which is in this case the UK. The charity should account for the VAT on the supply using the reverse charge mechanism.