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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5113
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Good morning, I am a UK based LLP and entered into a consultancy

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Good morning, I am a UK based LLP and entered into a consultancy agreement with a German compay. Do I have to charge VAT on the consultany fee or does the reverse charge apply? Kind regards, Roman
Customer: replied 2 years ago.
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Customer: replied 2 years ago.
The German company suggested to put a note on the invoice that the reverse charge applies and issue the invoice net of any VAT.
Customer: replied 2 years ago.
without any VAT.
Thank you for you question.Under reverse charge, its the business customer who accounts for VAT on their purchase by adding it to its outputs and accounting for output VAT at the required rate, it also deducts VAT by claiming back the VAT as an input in the period. The net effect is NIL.I have seen this been applied in many cases where I deal with VAT for my clients. The German company's suggestion is right... you should put a note that reverse charge VAT applies. 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. and other Tax Specialists are ready to help you
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