When to charge VAT?

My client is VAT registered as he provides consultancy to UK businesses. A French business customer has now approached him for his consultancy services. Does my client need to charge UK VAT to this French customer?

In order to answer the question we would need to know what type of consultancy the client is providing, as the deemed place of supply, and consequently the VAT treatment, are determined by the nature of the supply.

To give an example, if the client provides IT consultancy this falls within the general rule for business to business (‘’B2B’’) supplies meaning that the place of supply is treated as being where the customer belongs and so the supply would be outside the scope of UK VAT.

On the other hand, land related services fall within one of the exceptions to the general rule, so if the client is providing consultancy services in relation to a particular site or the design of a building in the UK the place of supply would be the UK where the land is located, and UK VAT would be charged.

Other types of consultancy could potentially fall either under the general B2B rule for services or the exception for services related to land.

Detailed information can be found in VAT Notice 741A, sections 6-11 but it is important first to understand exactly the nature of your client’s consultancy as the description “consultancy services” is too broad to be able to reach a conclusion.

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