In the case of services, the decision on the place of delivery can be complicated. There are different rules that apply depending on: It should be noted that some overseas countries apply the « use and enjoyment » rules to certain services provided to individuals, and it is therefore necessary to check on a case-by-case basis whether there is a registration obligation in the client country. Please note that legal services related to real estate and real estate transactions do not fall into this category and details on the VAT treatment of real estate related transactions are listed below. From January 2021, the following UK VAT treatment will apply to litigation, advice and general legal/tax services provided by professional services provided by estate agents, architects, appraisers, etc. Typically, a UK B2C service provider would charge UK VAT to its customers in the EU (and outside the EU). There are special rules for the collection of VAT on the international supply of electronic services. Your office is located in the United Kingdom and you have permanent establishments in other countries, but the United Kingdom office is the one that deals primarily with the provision of services *It should be noted that B2C services of legal services are currently not taxed. This is an unintended effect of Brexit that is likely to be corrected by the EU. It is important that you keep abreast of changes in this area to minimize risk. Our multidisciplinary team is made up of specialists in a wide range of services, which means that you will always be represented by an expert in your field. Well, Brexit is now a reality.
Many of our clients in the legal sector ask what this means for UK-registered firms selling services to overseas clients. These special rules apply only to the carriage itself. The services of a driver, pilot, operator or crew are the general rule. In particular, for non-land legal services, the Value Added Tax Act 1994 overrides the place of supply rules for B2C transactions, so that the supply of these non-land legal services by a UK lawyer to a non-commercial client in the EU (or another third country) does not fall within the scope of UK VAT. If you provide legal services to a non-professional client based outside the UK but related to a property in England, this will be considered a domestic sale in the UK as the property is located in the UK. Therefore, your customer will be charged 20% VAT on the invoice. Conversely, if you supply services related to real estate in an EU Member State, you may be required to register for VAT in that Member State. For most services, the place of supply is determined by the « general rule ». However, some deliveries are subject to special rules that affect their place of delivery. Most professional businesses incur costs to provide services to a client, such as travel and meals.
These services have been provided to the Company by a third party and enable it to provide its professional services to its client. The third party did not provide any services directly to the customer. Therefore, these costs form part of the value of the provision of professional services to the client and VAT must be calculated on the total amount of the fees, including the costs invoiced. This should be done irrespective of whether the costs incurred by the business are subject to VAT. Thus, when a zero train ticket is charged (for example) to a customer, it is only part of the fee charged for services. The company does not make zero-rate travel deliveries to its customer; It simply calculates its cost of providing its standard service. If this is incorrectly calculated as a « payment » and treated as a zero rate, VAT will be underestimated. If you are an intermediary, where you provide your services depends on whether your client is doing business or not. The place of admission to an event is the place where the event takes place, regardless of where the customer or supplier is located. This includes services such as: From 1 January 2021, you will no longer have to complete and submit an EC sales list for UK services to customers subject to VAT in the EU. However, special rules apply to certain types of B2C services.
Selling legal services to clients outside the UK may not currently apply to you, but these changes should be noted. However, different VAT rules apply to services supplied to foreign customers or to real estate abroad. The VAT treatment of certain legal services may vary depending on the responses to: VAT Note 744B: Freight and related services contains more information on the VAT rules applicable to freight transport services. The supply of B2B services between the UK and the EU therefore does not fall within the scope of UK VAT.