Billing in dollars, VAT applicable?

[Sunny33]

Hello Folks,
I have got a contract role with a US company to work for their client in UK. I will be billing the US company in dollars and they pay me the amount into my company account at the prevailing conversion rate. They say that VAT is not applicable as it is being billed to a company outside UK, I am not sure as this is my first billing in dollars.

Can some one in the forum please confirm whether VAT is applicable or not, if its applicable then the rate doesn't workout and I will have to let go the contract.

Thanks in advance,
San

[BolshieBastard]

If the work is being done in the UK, Im pretty certain that is what counts not, where the bill is sent to. Its like if you buy something outside of the UK VAT is added to the price you pay when it s finally imported.

[AtW]

Currency should not matter, if the client is outside of EU then no VAT should apply for services - there can be exceptions, best to call HMRC VAT Support line: they are very helpful.

[jamesbrown]

The currency isn't relevant when determining whether the services are out of scope of VAT.

There are place of supply rules. If your place of supply is outside the scope of VAT, then you don't charge VAT.

HM Revenue & Customs: How to work out your place of supply of services for VAT

HM Revenue & Customs

In general, if this is a business to business relationship with services supplied to a US business, the place of supply is the US and the services are outside the scope of VAT.

However, you talk about a client in the UK. My understand (and I could be wrong) is that the place of supply would be the UK in that case. See Section 3.6 in the second link above. Bottom line: I would contact the support line as AtW mentions.