Supply of services from the UK to the US considerations e.g. VAT, Payments etc. Supply of services from the UK to the US considerations e.g. VAT, Payments etc.
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  1. #1

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    Default Supply of services from the UK to the US considerations e.g. VAT, Payments etc.

    Greetings all,

    Apologies if this has been covered elsewhere but I've looked through quite a few posts and couldn't find it. The limited company that I am working for is supplying my programming services to a US company. The main question I have is around VAT. What I've read suggests that I don't have to charge VAT (also, the limited company isn't registered for VAT, yet, but will be in the future) given that it is 'bespoke' software and it is outside the EC. Anyone know if there are implications on the other side of the Atlantic?

    Also, I noticed that some folk recommended having a bank account in the US and just leaving the cash there (on the assumption my company doesn't need it right away). This appeals as a hedge against GBP. Is this as simple as my employer asking their bank for a business bank account in the US?

    Any other suggestions much appreciated.

  2. #2

    Still gathering requirements...


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    You're correct - the exact bit you're referring to is the VAT Act 1994, Sch.5, Paragraph 3. You don't have to charge VAT.

    For the most part, you shouldn't have to worry about anything in the USA, although remember that taxes vary from state to state.

    Quote Originally Posted by WhenItRains View Post
    I noticed that some folk recommended having a bank account in the US and just leaving the cash there (on the assumption my company doesn't need it right away). This appeals as a hedge against GBP. Is this as simple as my employer asking their bank for a business bank account in the US?
    Is there a specific reason why you wouldn't open a dollar account in the UK? All good banks that service businesses will offer dollar and euro accounts. This saves you the paperwork and headache of opening an account in the US with a US bank, as well as the US tax issues that will crop up.

  3. #3

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    Default Supply of Services to the Netherlands

    Quote Originally Posted by lxt04 View Post
    You're correct - the exact bit you're referring to is the VAT Act 1994, Sch.5, Paragraph 3. You don't have to charge VAT.

    For the most part, you shouldn't have to worry about anything in the USA, although remember that taxes vary from state to state.



    Is there a specific reason why you wouldn't open a dollar account in the UK? All good banks that service businesses will offer dollar and euro accounts. This saves you the paperwork and headache of opening an account in the US with a US bank, as well as the US tax issues that will crop up.

    I have a similar type question in respect to supplying software to the Netherlands from a Tax perspective. If the work is carried out in the UK by UK Contractors and then supplied to a Netherlands Company and then Invoiced from a UK Ltd Company is there any local Dutch Tax or VAT that I would be liable for? Or am I only subject to the regular UK Company Accounting Rules?

    Appreciate any insight into this...?

  4. #4

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    Quote Originally Posted by BenniDorm View Post
    I have a similar type question in respect to supplying software to the Netherlands from a Tax perspective. If the work is carried out in the UK by UK Contractors and then supplied to a Netherlands Company and then Invoiced from a UK Ltd Company is there any local Dutch Tax or VAT that I would be liable for? Or am I only subject to the regular UK Company Accounting Rules?

    Appreciate any insight into this...?

    Read my short thread on this (sticky) which covers current VAT rules.

    In short, you do not charge UK vat if you are vat registered, and your client is vat registered in Holland.

    You issues a sales invoice for the work/product, and account for it as income into the UK.

    It only gets complex when you start shipping workers to Holland, and you move the place of supply.

    I included some links in the sticky to the current rules, and despite the Eurocratic speak, they are not too hard to understand.
    I am not an expert, just someone who has experienced things first hand. If you need expert advice then seek out a qualified expert. My opinions are just that, my opinions. I could be wrong, and laws change, so trust nothing I say

  5. #5

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    Quote Originally Posted by nodric View Post
    Read my short thread on this (sticky) which covers current VAT rules.

    In short, you do not charge UK vat if you are vat registered, and your client is vat registered in Holland.

    You issues a sales invoice for the work/product, and account for it as income into the UK.

    It only gets complex when you start shipping workers to Holland, and you move the place of supply.

    I included some links in the sticky to the current rules, and despite the Eurocratic speak, they are not too hard to understand.
    I appreciate the very quick and informative reply. But please excuse my noviceness....but I'm struggling with te 'sticky', is this a link somewhere on your post...? Thanks

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    Quote Originally Posted by BenniDorm View Post
    I appreciate the very quick and informative reply. But please excuse my noviceness....but I'm struggling with te 'sticky', is this a link somewhere on your post...? Thanks
    Read the post here.

    It contains a good summary of the VAT rules in the EU etc, and also contains all the links to the EU/UK websites etc.
    I am not an expert, just someone who has experienced things first hand. If you need expert advice then seek out a qualified expert. My opinions are just that, my opinions. I could be wrong, and laws change, so trust nothing I say

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    If the anti-money laundering regulations in the US are anything like in the UK, I think you may struggle to open a bank account being a non-resident there.

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    Quote Originally Posted by SallyPlanIT View Post
    If the anti-money laundering regulations in the US are anything like in the UK, I think you may struggle to open a bank account being a non-resident there.
    Joint account with a US Citizen is easy to get, but you need to walk in to a branch with your passport.

    Open a Delaware LLC, and use the formation outfits to open you an account. No tax on Delaware LLCs if you are a non resident. Can also use it to invoice your US clients etc. Most of the big blue chips in the USA have their parents in Delaware. Hmmm, wonder why
    I am not an expert, just someone who has experienced things first hand. If you need expert advice then seek out a qualified expert. My opinions are just that, my opinions. I could be wrong, and laws change, so trust nothing I say

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