VAT Overseas Oil & Gas - Sub Contractor

[GES]

Hi,

I am supplying sub contractors and also conducting the work myself (engineering services). All our work is offshore on drilling vessels, drill ships and semi-submersibles etc in various locations around the world.

I can't charge the drilling companies UK VAT as their not registered in the UK but should the UK Subcontractors be billing me? All the work we conduct is overseas and my accountant said we don't need to charge VAT and he said since the work is overseas the sub contractors shouldn't be charging it either.

Any information would be great

Thanks

Alex

[sludgesurfer]

I think your accountant is right based on my experience of work outwith UK territorial waters.

For work related to North Sea activities, your answer will likely be found here:
UKOITC: North Sea Memorandum | Oil & Gas UK

VATPOSS08400 - VAT Place of Supply of Services - HMRC internal manual - GOV.UK

Services performed at or in relation to an offshore rig/platform or subsea wellhead is a land related service (Sched 4A Para 1). Where the location is outwith the 12 mile territorial limit, these services are considered exempt from VAT.

I'm currently working for a UK registered client on a platform 75 miles off the Shetland isles (Merry Christmas). I do not charge VAT for my services offshore (or onshore when performing work related to assets outwith territorial waters).

I would expect the same to apply to sub contractors given they are providing services to their client (you) who's primary business is related to 'land' outwith UK territorial waters but that sounds like something where specialist advice is required.

I state the reason why VAT is not charged on my invoices and my accountant insisted I got confirmation of the VAT arrangements from my client over and above that which was stated in the contract.

[TheCyclingProgrammer]

Where the location is outwith the 12 mile territorial limit, these services are considered exempt from VAT.

Exempt or out of scope? They aren’t the same and it can make a big difference if you’re on the flat rate scheme.

[sludgesurfer]

You're correct. It should be Out of Scope.