Legislation governing UK VAT (Value Added Tax) underwent fundamental changes effective 01 January 2010 as the UK implemented the European Union's VAT Package affecting cross-border supplies of services. VAT is charged on goods and services. Generally, VAT is charged where the supplier is established (place of supply). This continues to be the case where the supply of 'goods' is concerned. However, when it comes to the supply of services the 'place of supply' rule changed radically from 01 January 2010. The change is still not applicable where the recipient of the services is not a taxable person in the UK. In other words in the case of services supplied by a business to a consumer (B2C) the place of supply will continue to be where the supplier is established. The change is applicable and relevant only in respect of supplies made by an overseas business to a business based in the UK (B2B). In order for this 'place of supply' rule to apply the business in the UK must be a 'relevant business person' (practically all VAT Registered UK businesses are affected).
Land related services - provided where the land is located
Restaurant and catering services - offered where the services are physically provided. For flight kitchen services, they are provided at the place of departure.
Short term hire of transport - a service where the vehicle is made available to the customer.
Cultural, artistic, sporting, scientific, educational, entertainment and similar services - provided where the activity takes place.
The supply of passenger transport begins at the point of transport.
As a consequence of this change most of the services provided from outside to VAT registered businesses established in the UK are treated as 'supplied' in the UK. The business customers will need to account for VAT under the reverse charge mechanism. 'Taxi shift accounting' involves a customer acting both as the supplier and as the customer - charging itself VAT and then claiming it back, as long as the service is VAT-taxable. So there's no net cost to the business customer - VAT on purchases and assumed sales cancel each other out.
When a UK VAT Registered business supplies services to businesses established in another EU member country the place of supply is the customer's country. So the UK business will need to complete an EC Sales List (ESL) for each calendar quarter and submit it to HMRC within 14 days if filed using paper returns and 21 days when filed online. This is necessary to ensure that the business receiving intra-EU supplies of services is correctly accounting for VAT. If you take over a business as a going concern from an owner who was, or was required to be, VAT registered, you must register for VAT if the total value of your taxable supplies together with the taxable supplies provided by the business being taken, when added together, exceeds the VAT registration threshold (currently £70,000). Taxable supplies made in the last 12 months to the date of takeover only need to be considered. Registration is not required if you qualify for exemption from registration. You qualify for exemption if the goods or relevant supplies that you make are zero-rated.
.jpg)
Very high and nice post. To register a company in the UK, first choose a unique name and business structure. Then, prepare the necessary documents, including articles of association and memorandum of association. Next, appoint directors and a company secretary (if required). Register your company with Companies House online or by mail, providing details of directors, shareholders, and the registered office address. Pay the registration fee, which varies depending on the method chosen. Once registered, obtain a Unique Taxpayer Reference (UTR) from HM Revenue & Customs (HMRC) for tax purposes. Finally, comply with ongoing reporting and filing requirements, such as annual accounts and confirmation statements. Unlock the full potential of register a business by clicking here to access our exclusive content, including how-to guides, FAQs, and customer testimonials.
ReplyDelete