IT Services and place of supply for VAT

Hi

I have a UK based customer who sells IT type services

These are web design services, and digital marketing services.

I have read the VAT information on this and also spoken to the VAT helpline and just wanted to ensure I have got this straight. Sorry if it is a basic question.

would these be therefore electronically supplied services - as IT is involved and delivered over the web?

They would be standard rated supplies in the UK - I don't think any special rate applies.

If they are selling to VAT registered customers in the EU and in the UK - so the place of supply is where the customer is- under the general rule. So EU would be subject to R/C, standard rated if in the UK and Zero rated if outside the EU.

but if they are selling B to C and they are classed as electronically supplied services then the general rule for BtoC is superceeded by the place of supply being where the consumer is ----is this correct.. so in effect the same VAT rate is applied for BtoC and for BtoB

many thanks for your help on this...

Comments

  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    pirate wrote: »
    Hi

    I have a UK based customer who sells IT type services

    These are web design services, and digital marketing services.

    I have read the VAT information on this and also spoken to the VAT helpline and just wanted to ensure I have got this straight. Sorry if it is a basic question.

    would these be therefore electronically supplied services - as IT is involved and delivered over the web?

    They would be standard rated supplies in the UK - I don't think any special rate applies.

    If they are selling to VAT registered customers in the EU and in the UK - so the place of supply is where the customer is- under the general rule. So EU would be subject to R/C, standard rated if in the UK and Zero rated if outside the EU.

    but if they are selling B to C and they are classed as electronically supplied services then the general rule for BtoC is superceeded by the place of supply being where the consumer is ----is this correct.. so in effect the same VAT rate is applied for BtoC and for BtoB

    many thanks for your help on this...

    I would agree with what you are saying because HMRC says:

    "if you are:

    a UK business which supplies electronically supplied services
    your services are B2C supplies, and
    your existing accounting systems are set up to tax supplies where they are effectively used and enjoyed,
    you may, exceptionally, opt to apply the use and enjoyment rules to your supplies of electronically supplied services."

    "Effective use and enjoyment takes place where the customer actually consumes the electronically supplied services irrespective of contract, payment or beneficial interest."

    http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_029955&propertyType=document#P1013_127293
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