Vat question for a friend
Discussion
VAT related question - He will be providing a business consultancy service to a company in Saudi Arabia for 12 weeks, effectively sub-contracting. All work will be performed in Saudi Arabia. A UK based company (to which He have no ties) will invoice the Saudi company, I will invoice the UK based company in GBP. Do Heneed to charge VAT to the UK based company?
Im no accountant. I’ve said it’s simple and the answer is no. The service is supplied in Saudi.
Anyone in the know. He is vat registered and he operates through a ltd company.
What you have written is not clear. The UK company supplying services to the Saudi company presumably would not add VAT to its invoice. The relationship between the two UK companies needs more clarification. Can you try again perhaps naming them companies A, B and C. The ‘Heneed’ word is confusing me!
Burwood said:
VAT related question - He will be providing a business consultancy service to a company in Saudi Arabia for 12 weeks, effectively sub-contracting. All work will be performed in Saudi Arabia. A UK based company (to which He have no ties) will invoice the Saudi company, I will invoice the UK based company in GBP. Do Heneed to charge VAT to the UK based company?
Im no accountant. I’ve said it’s simple and the answer is no. The service is supplied in Saudi.
Anyone in the know. He is vat registered and he operates through a ltd company.
Im no accountant. I’ve said it’s simple and the answer is no. The service is supplied in Saudi.
Anyone in the know. He is vat registered and he operates through a ltd company.
He means ‘we need’ I think. Probably using an iPhone 
.
I’m curious about this one too. Not for related reasons, just out of interest as I’ve had a reasonable amount of dealings with vat but never quite in these exact circumstances.
I’ve done similar though, worked a month abroad somewhere, then invoiced the U.K. client on my return. I charged vat.
Actually, If you are both vat registered it makes no difference to either of you if you charge the vat or not so you may as well just charge it.
.I’m curious about this one too. Not for related reasons, just out of interest as I’ve had a reasonable amount of dealings with vat but never quite in these exact circumstances.
I’ve done similar though, worked a month abroad somewhere, then invoiced the U.K. client on my return. I charged vat.
Actually, If you are both vat registered it makes no difference to either of you if you charge the vat or not so you may as well just charge it.
Sorry, he sent the post with ‘i’ and I edited it.
Company A is a uk consultancy. It has a contract with the Saudi govt supplying forensic financial services.
Company A is hiring my friend on a 12 week basis, rolling. He is here in the UK. He operates through company B, a U.K. registered and vat registered entity. He has nothing to do with company A
The contract states ££ per day inclusive of vat, if any. He thinks no vat. No work is supplied here.
Tia
Company A is a uk consultancy. It has a contract with the Saudi govt supplying forensic financial services.
Company A is hiring my friend on a 12 week basis, rolling. He is here in the UK. He operates through company B, a U.K. registered and vat registered entity. He has nothing to do with company A
The contract states ££ per day inclusive of vat, if any. He thinks no vat. No work is supplied here.
Tia
If a Saudi company purchased a widget from the U.K. and the U.K. company had proof of export, they wouldn’t charge vat. So I assume that as the supply is outside EU he doesn’t need to charge it. He’s interested because the daily rate is rather ridiculous and the contract states incl if vat if any
Burwood said:
Eric Mc said:
Who is he billing for his services?
From what you are describing above, he is billing a UK based company - not the Saudi customer.
Yes, he bills the U.K. consultancy. TiaFrom what you are describing above, he is billing a UK based company - not the Saudi customer.
My amateur reading of this (I have done similar before but not quite the same) is that company B needs to invoice company A with VAT added because company B is providing company A with a service in the UK. Company A claims the VAT back in the UK and has separate arrangements to invoice the Saudi Company with no VAT.
Sheepshanks said:
Burwood said:
He is vat registered and he operates through a ltd company.
You’re saying he’s VAT registered in his own right?The fee being quoted as inclusive of VAT is odd too.
w1bbles said:
My amateur reading of this (I have done similar before but not quite the same) is that company B needs to invoice company A with VAT added because company B is providing company A with a service in the UK. Company A claims the VAT back in the UK and has separate arrangements to invoice the Saudi Company with no VAT.
Thanks for the opinion. One thing. Company B provides services in Saudi. Company A (the company your friend's company is billing) is correct in not charging VAT on its invoices to the Saudi customer.
Your friend's company is working for Company A - which is a UK based, UK VAT registered business. Therefore, your friend's company needs to charge VAT on his invoices to HIS customer (Company A).
And, as I said previously, as Company A is a UK, VAT registered business, it can reclaim from HMRC any VAT that is has been charged by your friend's company. In other words, it is of no consequence to Company A that your friend's company is charging them VAT. They can reclaim it in the normal way.
Your friend's company is working for Company A - which is a UK based, UK VAT registered business. Therefore, your friend's company needs to charge VAT on his invoices to HIS customer (Company A).
And, as I said previously, as Company A is a UK, VAT registered business, it can reclaim from HMRC any VAT that is has been charged by your friend's company. In other words, it is of no consequence to Company A that your friend's company is charging them VAT. They can reclaim it in the normal way.
I know you’ve resolved this now, but just to be clear:
Company B is providing services to company A in the UK. The fact that one of the employees of company B is going overseas to fulfil the obligations of that contract is of no consequence in this case.
It’s always helpful to eliminate the individual in these cases and think about the companies and their contractual relationships.
Company B is providing services to company A in the UK. The fact that one of the employees of company B is going overseas to fulfil the obligations of that contract is of no consequence in this case.
It’s always helpful to eliminate the individual in these cases and think about the companies and their contractual relationships.
Burwood said:
Thanks for the opinion. One thing. Company B provides services in Saudi.
It is - but the 'supply' you are referring to in the post quoted is the supply by company A to the Saudis. The supply from company B to company A is in the UK.
Burwood said:
Cheers w1bbles, I thought (wrongly) that the critical point was where the supply took place. He’s very conservative and wants to be operating correctly. Thanks again
Burwood said:
The contract states ££ per day inclusive of vat, if any. He thinks no vat.
Not that it matters to me, but I still don't get this bit. If company A is resolute that their rate includes VAT, was your friend hoping to keep the gross amount? And if he can't, isn't that going to be quite a big hit?Gassing Station | Business | Top of Page | What's New | My Stuff