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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4723
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am a director of a UK VAT registered Ltd Co (IT software).

Customer Question

I am a director of a UK VAT registered Ltd Co (IT software). We are considering supplying our software to EU individuals who are mostly non-VAT-registered sole traders. So, as an export, would we be liable to charge UK VAT?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

If you sell goods or services to someone who isn't VAT registered in anothet EU country, you must charge VAT in the normal way - just as you would for a UK customer.
There are certain criteria for charging VAT pertaining to distance sales and you should consider it.

Confirmation of this and more information on it can be found here

http://www.hmrc.gov.uk/VAT/managing/international/exports/goods.htm#2


I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Thank you. Are you aware if the same is true in reverse - ie if we were an eg Irish or Dutch Ltd Co - supplying a UK non-VAT registered sole trader?

Expert:  taxadvisor.uk replied 2 years ago.

Simon, thank you for your reply.

I would guess the same rules would apply in other EU member states because of harmonisation of VAT rules.

You will have to check the distance sales thresholds for VAT rates in respective countries.

I hope this is helpful.

Customer: replied 2 years ago.

My question relates to Uber - its Dutch based app takes a UK consumer's money for a taxi ride - deducts its "facilitation fee" - banked in Holland - then pays a UK cab driver the remainder. It charges no VAT on its fee nor what it pays to a cab driver. Is such a "facilitation fee" outside the scope of VAT in any EU country? Would this suggest that Uber is more a Paypal payment processor than any kind of service provider? Many thanks

Expert:  taxadvisor.uk replied 2 years ago.
Simon, thank you for your reply..

If the activities of the business provider fall within the broad band of Financial Services (UBER is a tool), in my opinion these would be exempt for VAT purposes.. see VAT Notice 701/49

I hope this is helpful.

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