Supply of services
The two basic rules for services will remain unchanged post-transition:
Business-to-business (B2B) services
- The basic place of supply of B2B services will be where the customer belongs. If the business customer belongs outside the UK, the supply is outside the scope of UK VAT.
- The UK service provider must include the sale in Box 6 of their VAT return and ensure the invoice has a reverse-charge narrative to remind the customer of their reverse-charge obligation.
- The requirement to report the service on the supplier’s EC Sales List has been removed from 1st January 2021.
- The UK service provider can recover any related UK input tax provided the service would have been taxable were it made in the UK.
- If you use QuickBooks to keep your records, the VAT code to use is 0% RC.
Business-to-consumer (B2C) services
- The basic place of supply of B2C services is where the supplier belongs. This would ordinarily mean that UK VAT is chargeable on the service.
- The basic B2B and B2C rules apply in the majority of situations but there are some overrides that can change the place of supply.
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