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TaxRobin
TaxRobin, Tax Consultant
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Experience:  International tax
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I have a question regarding VAT, providing services within

Resolved Question:

I have a question regarding VAT, providing services within the UK and trade with a US based organisation. Background: I will be providing educational seminars within the UK on behalf of a US-based educational organisation. At the moment, students pay the US org. and the US org. pays me (as the teacher) direct. I do not charge them VAT as they are non-EU based. I understand there may be an issue with where the services are offered (in the UK/EU) and therefore I am looking for another solution. One option would be to charge students direct (which would require my business adding the VAT) and then paying a license fee to the US org.

I am currently on the HMRC website "Education and vocational training" - and it seems that my seminars my be exempt from VAT. In which case, it would seem best to charge students direct (without adding VAT) and then pay a licence fee.

I am trying to avoid charging extra for these seminars, but obviously wish to remain compliant! And I am obviously a little confused...Is there a solution that would be beneficial?

Best regards,

Michael

Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello,
If you change to invoicing the individual then the VAT rule would be the place of supply is where the supplier belongs.
The place of supply of admission to an event is the where the event takes place, irrespective of where the customer or supplier is located. These includes such services as:
entertainment and cultural performances - including sports events
the right to attend exhibitions, conferences, meetings or seminars
ancillary services - such as payments for cloakrooms or similar facilities
If the customer is a non-business customer then most supplies relating to events are subject to VAT where they are carried out. This includes all services connected to cultural, artistic, sporting, scientific and educational events, or entertainment.
You are correct if you charge the individuals then VAT will apply.
Using the US org as an intermediary would not solve your problem.
It seems best to stay with you and the US org having the contact and you not charging the US org VAT.
Customer: replied 3 years ago.

Hello,

I am a little confused - if I invoiced individuals direct for educational seminars held in the UK, would this service not be VAT-exempt?

Expert:  TaxRobin replied 3 years ago.
Hi,
It would not be VAT exempt. This is because they are individuals and the supply is going to be in the UK. This is because of the nature of what you supply.
If the customer is a non-business customer then most supplies relating to events are subject to VAT where they are carried out. This includes all services connected to cultural, artistic, sporting, scientific and educational events, or entertainment.
Customer: replied 3 years ago.

OK, one more question - just to refine this!

The customer is a fitness consultant / personal trainer paying for education to enhance their business, does this constitutes a B2B relationship?

Thank you

Expert:  TaxRobin replied 3 years ago.
Only if the individual has a business themselves. SO if they are an independent contractor in the US then they are considered self employed and would fit the definition of business. If they are employees of the US org then no. They would have to be a business themselves not just "in the business of" this work.
Customer: replied 3 years ago.

Hi Robin,

The courses are delivered in the UK and I am based in the UK, but I guess the same concept applies.

If the courses were delivered to 'exercise enthusiasts' then they would not have a business, but as they are delivered to personal trainers, they do have a business - and therefore I don't have to charge VAT.

Which clears it up!

Expert:  TaxRobin replied 3 years ago.
That is true as long as those personal trainers are not employees. In the US they can be either. There are companies that employee personal trainers and they contract to the public on behalf of the trainers.
I would think you need to make that distinction prior to charging them unless you only accept business applicants.
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