Irish Company has UK Contract - Charge VAT or not

[ShowMeTheMoney]

Hi

I am an Irish Registered Ltd Company and I won a contact to supply IT services to a UK Company.

1. Do I charge VAT to the UK Company for my invoices? I was told I do not have to as there is agreements between the UK and Ireland in relation to this

2. I have had to employ UK Contractors to help me with the work. Should they be charging VAT to my LTD company? Some of them operate via Umbrella compaines who insist they do charge VAT to my Irish company...

If I dont charge VAT to my client then I would not have the VAT element to pay my UK Contractors VAT on their invoices.

Any help appreciated

[ASB]

Ultimately it's a bit of a minefield....

From the UK end of things you need to look at place of supply rules, this largely governs whether or not vat should be charged. Place of supply can change based upon the services being supplied and where the EU registered entity is. i.e. the supply can be deemed to be the UK or potentially Ireland depending upon exactly what is being performed.

If you are charged VAT you may or may not be able to reclaim this depending upon any different rules or procedures that may be in place in ireland, so you need to check carfully both ends.

There is a lot of info on international trade on HMRC website - but you'll probably lose the will to live trying to figure it all out and how it fits with your specific circumstances.

It is also possible the work may be covered by the CIS which is another sort of nightmare altogether.

[Little'Old Me]

Ultimately it's a bit of a minefield....

From the UK end of things you need to look at place of supply rules, this largely governs whether or not vat should be charged. Place of supply can change based upon the services being supplied and where the EU registered entity is. i.e. the supply can be deemed to be the UK or potentially Ireland depending upon exactly what is being performed.

If you are charged VAT you may or may not be able to reclaim this depending upon any different rules or procedures that may be in place in Ireland, so you need to check carefully both ends.

There is a lot of info on international trade on HMRC website - but you'll probably lose the will to live trying to figure it all out and how it fits with your specific circumstances.

It is also possible the work may be covered by the CIS which is another sort of nightmare altogether.

ASB - Pretty good answer, even if I say so myself.

I used to have to deal with VAT for items that a company I worked for Built. We would sell it to another company in another country (often Ireland, but it could be Sweden or even Korea!), who would sell it to a UK company and then they (the Irish Company) would tailor it/add bits, and we would also supply Engineers to help service/install. Because the "kit" never left the UK, as we always delivered to the end customer, we the UK company charged VAT to the Irish Company, as it was all a UK supply.

They did not charge VAT to their customer in the UK. I believe they built the VAT as it was their expense, not the customers in their pricing. If there is a lot of VAT involved there are Accountancy companies that specialise in reclaiming the VAT for you. I used one 2 years ago, to reclaim £2k of VAT from Germany after we did a trade show there - so every receipt I could find from Germany that year was included. It cost us 15% (subject to a £150 min) in fees to do it, so it was worth doing.

I know we did it correctly, because our VAT records were checked every 3 years as our "kit" could do quite a lot of travelling before it reached it final destination!

[ShowMeTheMoney]

Thanks

Yes minefield alright. I was on to HMRC there who explained it is complex. I'm worried about paying the VAT myself but not charging VAT to my client then having to try to claim the VAT back from HMRC. Its not a huge huge sums of money but I cant afford the wait etc.

Will need to look into it carfully and get professional advice. Thanks again for the prompt reply

[TykeMerc]

Will need to look into it carfully and get professional advice. Thanks again for the prompt reply

I think that's the wisest course of action, I've looked into this sort of thing in the past and it seems to be far from simple.