Place of supply of services

Foreword

This notice cancels and replaces Notice 741 (May 2008) with effect from 1 January 2010. Details of the changes to the previous version can be found in paragraph 1.3 of this notice.

Further help and advice

If you need general advice or more copies of HM Revenue & Customs notices, please phone the Helpline on 0845 010 9000. You can call between 8.00 am and 8.00 pm, Monday to Friday.

If you have hearing difficulties, please phone the Textphone service on 0845 000 0200.

If you would like to speak to someone in Welsh, please phone 0845 010 0300, between 8.00 am and 6.00 pm, Monday to Friday.

All calls are charged at the local rate within the UK. Charges may differ for mobile phones.

Other notices on this or related subjects

Notice 700 | Notice 701/41 | Notice 709/6 | Notice 700/1 | Notice 701/49 | Notice 723 | Notice 700/2 | Notice 703 | Notice 725 | Notice 700/12 | Notice 703/1 | Notice 742 | Notice 700/15 | Notice 706 | Notice 744A | Notice 701/30 | Notice 708 | Notice 744B | Notice 701/36 | Notice 709/5 | Notice 744C

1. Introduction

1.1 Who should read this notice?

You should read this notice if you make supplies of services to customers in other Member States of the European Community (EC) or to customers outside the EC or if you receive services from suppliers that belong outside the UK.

1.2 What is this notice about?

This notice explains how to determine the place of supply of your services. It also explains how to deal with supplies of services which you receive from outside the United Kingdom (UK).

This notice and others mentioned are available on our website, go to www.hmrc.gov.uk

1.3 What has changed?

1 January 2010 saw the introduction of substantial changes to the place of supply of services rules. These changes include a new basic rule (‘the general rule’) for business to business (B2B) supplies and a reduction in the number of exceptions to the general rule. Further changes are due to come into effect on 1 January 2011, 1 January 2013 and 1 January 2015. This notice has been updated to provide guidance on the changes up to and including 1 January 2013.

The 2015 changes introduce new place of supply of services rules for business to consumer (B2C) supplies of telecommunications and broadcasting services. Guidance on these changes will be published at a later date.

You can access details of any changes to this notice since January 2010 either on our website, or phone our Helpline on 0845 010 9000.

1.4 What VAT law covers this notice?

UK VAT law covering this notice is contained in the Value Added Tax Act 1994, as amended, which is referred to in this notice as the VAT Act:

• A new section 7A of the VAT Act defines a ‘relevant business person’ for supplies of services. It also covers the general rule for business to business (B2B) and business to consumer (B2C) supplies of services. See paragraph 2.4 and section 5 of this notice.
• Section 8 of the VAT Act covers the reverse charge procedure. See section 18 of this notice.
• Section 9 of the VAT Act covers place of belonging. See section 3 of this notice.
• Schedule 3B of the VAT Act covers the special scheme for non-EC suppliers making supplies of electronically supplied services to consumers in the EC. See section 20 of this notice.
• Schedule 4A of the VAT Act covers the exceptions to the general rule. See table 1 in paragraph 2.4.3.
• Schedule 6 paragraph 8 of the VAT Act covers the valuation of reverse charge services. See section 18 of this notice.
• Schedule 8 Group 7 of the VAT Act covers the zero-rating provisions for international services. See sections 4, 8, 10, 11 and 13 of this notice.

EC VAT law covering this notice is contained in Council Directive 2006/112/EC (Principal VAT Directive) and Council Regulation (EC) No. 1777/2005 (Implementing Regulation). The Implementing Regulation has direct effect.

1.5 How to use this notice

This notice assumes you have a knowledge of the principles of VAT explained in Notice 700 The VAT Guide and have read Notice 700/15 The ins and outs of VAT.

It is unlikely that all the information in this notice will apply to you, so you do not need to read it all from cover to cover. The table at paragraph 2.4 will help you identify which sections are appropriate to you. There is a contents list and also an index in section 24 which covers popular areas. You should take care to read the beginning of appropriate sections and remember that lists of examples are not exhaustive.

1.6 What to do if you disagree with a decision made by HMRC

If you disagree with any decision made by HMRC you can ask for it to be reconsidered. You should certainly do so if you can provide further relevant information or if there are facts which you think may not have been fully taken into account. If you are still not satisfied, you may be able to appeal to an independent Tribunal. There are time limits for doing this.

If you do not agree with the result of our reconsideration you can appeal to the First-Tier Tribunal to decide the matter. There is more information about what you can do if you disagree with our decision in a HMRC factsheet and customer guidance which can be found on our website.

2. Place of supply of services

2.1 What is 'place of supply of services'?

For VAT purposes, the place of supply of services is the place where a service is treated as being supplied. This is the place where it is liable to VAT (if any). There are a number of place of supply rules for determining where services of different kinds are made:

• where the place of supply of services is in a Member State of the European Community (EC), that supply is subject to the VAT rules of that Member State and not those of any other country. If the Member State is not the UK, such supplies are said to be ‘outside the scope’ of UK VAT
• where the place of supply of services is outside the EC, that supply is made outside the EC and is therefore not liable to VAT in any Member State (although local taxes may apply). Such supplies are said to be ‘outside the scope’ of both UK and EC VAT.

2.2 What does 'place of supply' mean for UK suppliers?

If the place of supply of your services is the UK, you must charge any UK VAT due and account for it to HMRC regardless of where your customer belongs. If the place of supply of your services is another Member State, you or your customer may be liable to account for any VAT due to the tax authorities of that country. See paragraph 2.16.

Where the place of supply of your services is outside the UK, you should ensure that your records contain sufficient factual evidence that this is the case. See paragraph 2.7.

2.3 What services are being supplied?

To begin with, it is essential that you think carefully about the nature of any services that you supply (or receive). You must identify the real nature of a supply of services where general or generic descriptions are used, because it will determine which place of supply rule applies.

Although reference to your own costs may suggest the nature of your services, you should ask yourself ‘what am I supplying?’ Your invoices should explain the type of services you are actually providing.

2.4 How do I determine the place of supply of services?

From 1 January 2010 there are two general rules for the place of supply of services, one for business to business (B2B) and one for business to consumer (B2C) supplies. There are also special place of supply rules for certain services. Services covered by the special place of supply rules are detailed in table 1 below.

To identify whether someone is a business customer or a consumer see paragraphs 2.5 and 2.6. To decide where a supplier or a customer belongs see section 3.

2.4.1 The B2B general rule

The B2B general rule for supplies of services is that the supply is made where the customer belongs (see section 5).

2.4.2 The B2C general rule

The B2C general rule for supplies of services is that the supply is made where the supplier belongs (see section 5).

2.4.3 Table 1 Services covered by the special place of supply rules

There are special rules for:	For further information refer to:
services relating to land and property	section 6
services of short-term hire of means of transport; services of B2C long-term hire of means of transport made on or after 1 January 2013; services of B2C long-term hire of pleasure boats made on or after 1 January 2013	section 7 section 7 section 7
services involving physical performance. For example artistic, cultural, education and training, sporting, entertainment services, exhibitions, conferences, meetings; B2B supplies of admission to artistic, cultural, education and training, sporting, entertainment events, exhibitions, conferences and meetings and services related to admissions from 1 January 2011; ancillary transport, valuation of/work on goods	section 8 section 8 sections 5 (B2B supplies) and 8 (B2C supplies)
restaurant and catering services	section 9
passenger transport	section 10
B2C freight transport	section 11
certain intermediary services	section 12
B2C supplies of certain services which are mainly ‘intangible’ in character, supplied to customers belonging outside the EC.	sections 14 and 15

2.5 What does 'B2B supplies' mean?

For place of supply of services purposes ‘B2B supplies’ means supplies to businesses whose activities are wholly of a business nature. It also includes supplies to entities which have both business and non-business activities such as charities and government departments.

2.6 What does 'B2C supplies' mean?

For place of supply of services purposes ‘B2C supplies’ means supplies to:

• a private individual
• a charity, government department or other body which has no business activities, or
• a ‘person’ who receives a supply of services wholly for private purposes.

2.7 How do I satisfy myself that I make B2B supplies?

To satisfy yourself that this section applies you should obtain commercial evidence showing that your customer belongs outside the UK and does not receive your supply for a wholly private purpose.

For some supplies of services it will be clear that the supply would not be purchased by anyone for a wholly private purpose.

VAT registration numbers are the best evidence that the supply is not received for a wholly private purpose and should be requested. If your customer is unable to provide a VAT number, you can accept alternative evidence. This includes certificates from fiscal authorities, business letterheads or other commercial documents indicating the nature of the customer’s activities. Such evidence should be kept as part of your records. Where VAT numbers are available, they should be shown on your invoice.

Some customers may be VAT registered but have non-business as well as business activities. Examples of such customers are government departments and municipal authorities or similar bodies. In such circumstances provided your customer receives the services for the purpose of their business or non-business activities (such as statutory duties or charitable activities) the place of supply is determined by where the customer belongs. If the services you are supplying to your customer are being used for a wholly private purpose, it is not a B2B supply. Instead you will need to decide whether the B2C general rule or one of the other place of supply rules applies.

See section 19 for the additional requirements for suppliers of electronically supplied services.

2.8 Why isn’t there just one place of supply rule for all services?

There is not one place of supply rule for all services because, where the customer belongs in one country and the supplier in a different country, rules are needed to determine the correct place of supply of the services in question.

Where the place of supply is in a Member State, rules are necessary to avoid the possibility of supplies being taxed more than once, or not at all.

2.9 VAT liability

This notice does not cover VAT liability. There is no general relief for the export of services as there is for goods. Services supplied in the UK may be exempt, zero-rated, standard-rated or liable to VAT at a reduced rate. For information on the VAT liability of supplies see Notice 701/39.

2.10 Tour operators’ margin scheme

If you buy, from a third party, travel, hotel, holiday and certain other supplies of a kind enjoyed by travellers and resell them as principal and in your own name, there are different place of supply rules. See Notice 709/5 Tour operators’ margin scheme.

2.11 What are the territorial limits of the UK?

The UK consists of Great Britain, Northern Ireland and the waters within 12 nautical miles of their coastlines. The Isle of Man is treated as part of the UK for VAT purposes and VAT is chargeable in the Isle of Man (under Manx law which generally parallels UK legislation). There is no VAT in the Channel Islands, which are outside the UK and EC for VAT purposes.

The territorial limits of the EC, which are important in establishing where particular types of service are supplied, are shown in section 21.

2.12 Can I recover input tax?

If you supply services, you may recover (subject to the normal rules) input tax related to:

• taxable supplies
• supplies made outside the UK which would be taxable if they were made in the UK, or
• supplies of exempt insurance services and certain exempt financial services, and supplies made outside the UK which would have been exempt supplies if they had been made in the UK, where they are:

• made to a person who belongs outside the EC
• supplies directly linked to the export of goods to a place outside the EC, or
• the making of arrangements for such supplies.

See also Notice 706 Partial exemption.

2.13 Can businesses recover VAT incurred in other Member States?

A business customer who incurs VAT in other Member States may be able to claim a refund of VAT incurred on services supplied in the UK. See Notice 723 Refunds of VAT in the EC for EC and non-EC businesses.

2.14 Could I be liable to register for VAT in the UK?

If you belong in the UK or belong outside the UK and supply services whose place of supply is in the UK, you may be liable to register for VAT in the UK (subject to the relevant current registration threshold).

Information about registering for VAT in the UK is given in Notice 700/1 Should I be registered for VAT?

2.15 How do I fill in my UK VAT return?

If you are registered for VAT in the UK you must complete a VAT return for each tax period and submit it to HMRC by the due date. Guidance on how to fill in your VAT return is contained in Notice 700/12 Filling in your VAT return. If you receive supplies of services that are made in the UK and where you are responsible for accounting for any UK VAT due under the reverse charge procedure see paragraph 18.3.

2.16 Could I be liable to register for VAT in other Member States?

If you supply services whose place of supply is in another Member State, you may be liable to register for VAT in that country (subject to its VAT registration rules). If you do not have an establishment in that Member State, you may need to appoint a local tax representative to account for VAT there on your behalf.

Details of contact addresses and other useful information provided by the VAT authorities in other Member States can be found on the Commission website.

3. Place of belonging

The law on place of belonging is in the VAT Act, section 9.

UK VAT law refers to ‘belonging’ whereas EC VAT law refers to ‘establishment’. These two terms have the same meaning for VAT purposes.

3.1 Why are ‘belonging’ rules necessary?

For certain types of supply the place where a supplier or customer belongs determines where services are supplied and who accounts for any VAT due. Rules are needed to ensure that the correct place of supply is identified.

You can find more information about this in sections:

• 5 – B2B general rule services (supplied where the customer belongs) and B2C general rule services (supplied where the supplier belongs)
• 14 – B2C services supplied where the customer belongs
• 16 – Use and enjoyment of hire of means of transport, letting on hire of goods, telecommunications services and radio and television broadcasting services, and
• 17 – Use and enjoyment of electronically supplied services.

The place of supply of land-related services is where the land is located. See section 6. The place of supply of ‘where performed’ services is generally the place of performance. See section 8. Therefore the place of belonging of either the supplier or the customer does not affect the place of supply of these services.

3.2 When do I belong in the UK?

You belong in the UK for the purposes of either making or receiving supplies of services when any of the following apply:

• you have a business establishment (see paragraph 3.3) or some other fixed establishment (see paragraph 3.4) in the UK and none elsewhere
• you have a business establishment in the UK and fixed establishments in other countries, but the UK establishment is most directly connected with making or receiving the supplies in question
• you have a fixed establishment in the UK and a business establishment and/or fixed establishments overseas, but the UK establishment is most directly connected with making or receiving the supplies in question, or
• you have no business or fixed establishment anywhere, but your usual place of residence is the UK. See paragraph 3.5.

3.3 What is a business establishment?

The business establishment is the principal place of business and is usually the head office, headquarters or ‘seat’ from which the business is run. There can be only one such place which may be an office, showroom or factory.

3.3.1 Examples of business establishment

• A business has its headquarters in the UK and branches in France, Italy and Germany. Its business establishment is the headquarters in the UK.
• A company is incorporated in the UK but trades entirely from its head office in Bermuda. Its business establishment is the head office in Bermuda.

3.4 What is a fixed establishment?

A fixed establishment is an establishment other than the business establishment, which has the technical and human resources necessary for providing or receiving services permanently present. A business may have several fixed establishments, which may include a branch of a business or an agency.

If you have a temporary presence of human and technical resources, this does not create a fixed establishment in the UK. For example, an overseas television company sending staff and equipment to the UK to film for a week does not constitute a fixed establishment in the UK.

Where you have establishments in more than one country, you will need to decide which one is most directly connected with a supply. See paragraph 3.6.

3.4.1 Examples of fixed establishment

• An overseas business sets up a branch comprising staff and offices in the UK to provide services. The UK branch is a fixed establishment.
• A company with a business establishment overseas owns a property in the UK which it leases to tenants. The property does not in itself create a fixed establishment. However, if the company has UK offices and staff or appoints a UK agency to carry on its business by managing the property, this creates a fixed establishment in the UK.
• An overseas business contracts with UK customers to provide services. It has no human or technical resources in the UK and therefore sets up a UK subsidiary to act in its name to provide those services. The overseas business has a fixed establishment in the UK created by the agency of the subsidiary.
• A company is incorporated in the UK but trades entirely overseas from its head office in the USA, which is its business establishment. The UK registered office is a fixed establishment.
• A UK company acts as the Operating Member of a consortium for offshore exploitation of oil or gas using a fixed production platform. The rig is a fixed establishment of the Operating Member.

3.5 What is the usual place of residence?

If a limited company or other corporate body has neither a business establishment nor other fixed establishment in any country, its usual place of residence (in other words, its place of belonging) is where it is legally constituted.

Individuals receiving supplies in a private capacity are treated as belonging in the country where they have their usual place of residence. An individual has only one usual place of residence at any point in time. Individuals are normally resident in the country where they have set up home with their family and are in full-time employment. They are not resident in a country they are only visiting as a tourist.

3.5.1 Examples of usual place of residence

• The board of directors of a company incorporated in Bermuda, which has no business or fixed establishment anywhere in the world, meet from time to time in different countries, including the UK. The company belongs in Bermuda where it is incorporated.
• A person lives in the UK, but commutes to France daily for work. He belongs in the UK.
• Overseas forces personnel on a tour of duty in the UK live in rented accommodation with their families. They have homes overseas to which they periodically return on leave. They belong in the UK throughout their tour of duty.

3.5.2 What is the usual place of residence of a person with no right to remain in the UK?

For VAT purposes, persons who have not been granted a right or permission to remain in the UK should be treated as belonging in their country of origin. This will apply to, for example, asylum seekers and those entering the UK without permission.

In these circumstances, the country in which individuals have their usual or permanent place of residence can only reasonably be seen to be their country of origin unless and until they are granted the right to remain in the UK.

Once an individual has been granted leave or permission to remain in the UK, they belong in the UK.

3.6 I have more than one establishment. Where do I belong?

If, as either the supplier or the recipient of services, you have establishments in more than one country, the supplies you make from, or receive at, each establishment have to be looked at separately. For each supply of services, you are regarded as belonging in the country where the establishment most directly connected with that particular supply is located.

To decide which establishment is most directly connected with the supply, you should consider all the facts, including:

• for suppliers, from which establishment the services are actually provided
• for recipients, at which establishment the services are actually consumed, effectively used or enjoyed
• which establishment appears on the contracts, correspondence and invoices
• where the directors or others who entered into the contract are permanently based, and
• at which establishment decisions are taken and controls are exercised over the performance of the contracts.

Normally it is the establishment actually providing or receiving the supply of services which is the establishment most directly connected with the supply, even if the contractual position is different.

3.6.1 Examples where a business has more than one establishment

Where a supplier has more than one establishment:

• A company whose business establishment is in France contracts with a UK bank to supply French speaking staff for the bank’s international desk in London. The French company also has a fixed establishment in the UK created by a branch, which provides staff to other customers. The French establishment deals directly with the UK bank without any involvement of the UK branch. The staff are supplied by the French establishment.
• An overseas business establishment contracts with private customers in the UK to provide information. The services are provided and invoiced by its UK branch. Customers’ day to day contact is with the UK branch and they pay the UK branch. The services are actually supplied from the UK branch which is a fixed establishment.

Where a recipient has more than one establishment:

• A UK supplier contracts to supply advertising services. Its customer has its business establishment in Austria and a fixed establishment in the UK created by its branch. Although day-to-day contact on routine administrative matters is between the supplier and the UK branch, the Austrian establishment takes all artistic and other decisions about the advertising. The supplies are received at the overseas establishment.
• A UK accountant supplies accountancy services to a UK incorporated company which has its business establishment abroad. However, the services are received in connection with the company’s UK tax obligations and therefore the UK fixed establishment, created by the registered office, receives the supply.
• A customer has a business establishment in the UK and a fixed establishment in the USA created by its branch. The UK establishment contracts a UK company to provide staff to the USA branch. The supplier invoices the UK establishment and is paid by them. The services are most directly used by the USA branch and therefore are received at the overseas establishment.

3.7 What if I am unsure where my customer belongs?

If you are unsure where your customer belongs you should refer to paragraphs 3.6 and 3.6.1 for help in determining which of your customer’s establishments receives your services. Further factors which may help you decide this, include:

• obvious use of your services at a particular establishment (for example, the lease of equipment for use at that establishment)
• taking your instructions from a particular establishment
• the service relating to business being conducted by your customer in an establishment in a particular country (such as written reports or accounts), and
• delivering any ‘products’ (like a mastertape) to a particular establishment.

However, it is always necessary to consider all the facts.

If you are a supplier it is your responsibility to find out at which establishment your customer receives your supplies and therefore whether or not UK VAT is chargeable. If you have established the facts about your customer but are still unsure about where your services are received, you should contact our Helpline for guidance.

3.8 Securities

There is a special rule, known as the ‘easement’ for supplies of securities, where the identity of the purchaser is not known (see paragraph 15.6.4).

4. International services: zero-rating

The law on zero-rating of certain international services is in the VAT Act Schedule 8 (Zero-Rate) Group 7 (International services).

Zero-rating (under an extra-statutory concession) also applies to training services supplied to overseas governments. See paragraph 8.2.

Zero-rated supplies are taxable supplies on which the rate of VAT is nil. Related input tax you incur may be recovered subject to the normal rules.

4.1 When does zero-rating apply?

Zero-rating under Group 7 of Schedule 8 of the VAT Act can apply to certain international services where the place of supply is the UK. Zero-rating under Group 7 does not cover services where the place of supply is outside the UK and consequently outside the scope of UK VAT.

4.2 Which international services can zero-rating apply to?

If the place of supply of the international services is the UK and certain conditions are met, zero-rating may apply to the following types of service:

• work on goods for export from the EC. See paragraph 8.6, and
• intermediary services. See section 13.

4.2.1 Do I need to keep evidence for zero-rating?

You must keep evidence (for example, commercial documentation) to substantiate the zero-rating of supplies you make (see paragraph 8.6.4).

4.2.2 What if my services do not qualify for zero-rating?

If the place of supply of your services is the UK and they do not qualify for zero-rating, then you should charge UK VAT in the normal way.

5. General rule services

The law on general rule services is in the VAT Act, section 7A.

5.1 Why are there two different general rules for the place of supply of services?

From 1 January 2010 there are two different general rules for business to business (B2B) and business to consumer (B2C) supplies of services to better achieve taxation where services are consumed.

5.2 What is the B2B general rule for supplies of services?

If you supply B2B services, other than those covered by the special rules described in the other sections of this notice, the place of supply of your services is the place where your customer belongs for the purposes of receiving your supply (see section 3).

This is known as the B2B general rule. If you supply services that fall under this section and your customer belongs outside the UK, your supply is outside the scope of UK VAT. If your customer belongs outside the EC there may be local taxes which apply.

If your supply is taxable at a standard or reduced rate of VAT (that is to say that the supply is not exempt or zero-rated) and is made to a customer belonging in another Member State who is VAT registered there, with effect from 1 January 2010 you may need to complete and submit an EC Sales List. See Notice 725 The single market.

If however, your customer belongs in the UK, you must account for any UK VAT due.

To decide if you make B2B supplies see paragraph 2.5.

If you provide bought-in supplies of hired means of transport for the direct benefit of a traveller see paragraph 2.10.

If you supply B2B intermediary services where the place of supply is the UK, but the arranged supply is supplied outside the EC you may be able to zero-rate your supply. See section 13.

5.3 What is the B2C general rule for supplies of services?

If you supply B2C services, other than those covered by the special rules described in the other sections of this notice, the place of supply of your services is the place where you belong for the purposes of making your supply (see section 3).

This is known as the B2C general rule. If you supply services that fall under this section and you belong in the UK, you must account for any UK VAT due, no matter where your customer belongs.

To decide if you make B2C supplies see paragraph 2.6.

If you provide bought-in supplies of hired means of transport for the direct benefit of a traveller see paragraph 2.10.

5.4 How do I decide if services fall under the B2C or B2B general rules?

It is not possible to give a conclusive definition of B2C and B2B general rule services. The B2C and B2B general rules will only apply if a supply of services cannot be seen to fall under any of the other rules. Before deciding that a supply falls under the B2C or B2B general rules, you should identify the exact nature of your services and consider them against the other rules.

5.5 Additional rules for supplies of hire of a means of transport, letting on hire of goods, telecommunications services, radio and TV broadcasting services and electronically supplied services

In addition to the rules in this section and section 18 (which covers B2B supplies received in the UK), there are additional rules for supplies of letting on hire of a means of transport, letting on hire of goods, telecommunications services, radio and TV broadcasting services and electronically supplied services, depending on where they are used and enjoyed. See sections 16 and 17.

6. Services relating to land

The law on land-related services is in the VAT Act Schedule 4A paragraph 1.

6.1 What is the place of supply of services relating to land?

If you supply services that relate to land or property, the place of supply of those services is where the land itself is located, irrespective of where you or your customer belong.

If you supply bought-in supplies of land-related services, such as hotel accommodation, or provide land-related services together with other bought-in supplies (for example, passenger transport), for the direct benefit of a traveller, see paragraph 2.10.

6.2 What is the VAT liability of supplies relating to UK land or property?

This notice deals only with the place of supply of land-related services. Once you have identified a supply of services relating to UK land or property, you then need to determine its VAT liability by referring to Notice 708 Buildings and construction and Notice 742 Land and property.

6.3 What is ‘land’ for the purposes of this section?

For the purposes of this section ‘land’ includes all forms of land and property; growing crops, buildings, walls, fences, civil engineering works or other structures fixed permanently to the land or seabed. It also covers plant, machinery or equipment which is an installation or edifice in its own right, for example, a refinery or fixed oil/gas production platform. Machinery installed in buildings other than as a fixture is normally not regarded as ‘land’ but as ‘goods’.

6.4 Examples of land-related services

• The supply of hotel accommodation.
• The provision of a site for a stand at an exhibition where the exhibitor obtains the right to a defined area of the exhibition hall. See section 8 where sites are not defined.
• Services supplied in the course of construction, conversion, enlargement, reconstruction, alteration, demolition, repair or maintenance (including painting and decorating) of any building or civil engineering work.
• The supply of plant or machinery, together with an operator, for work on a construction site.
• Services of estate agents, auctioneers, architects, solicitors, surveyors, engineers and similar professional people relating to land, buildings or civil engineering works. This includes the management, conveyancing, survey or valuation of property by a solicitor, surveyor or loss adjuster.
• Services connected with oil/gas/mineral exploration or exploitation relating to specific sites of land or the seabed. See sections 5, 8 and 14 where such services do not relate to specific sites.
• The surveying (such as seismic, geological or geomagnetic) of land or seabed, including associated data processing services to collate the required information.
• Legal services such as conveyancing or dealing with applications for planning permission.
• Packages of property management services which may include rent collection, arranging repairs and the maintenance of financial accounts.
• The supply of warehouse space.

6.5 What if my services are not directly land-related?

This place of supply rule applies only to services which relate directly to a specific site(s) of land or property. It does not apply if a supply of services has only an indirect connection with land, or if the land-related service is only an incidental component of a more comprehensive supply of services.

For example, the services of an interior designer contracted to redesign the decor of a particular hotel would be land-related. However, if the same supplier was contracted to create a ‘corporate’ colour scheme/style for a hotel chain to use in their own properties, those design services would not be land-related. See section 5 if you make B2B supplies and sections 14 and 15 if you make B2C supplies of such services.

6.5.1 Examples of services which are not land-related

• Repair and maintenance of machinery which is not installed as a fixture. This is work on goods. See section 5 if you make B2B supplies of such services. See section 8 if you make B2C supplies of such services.
• The hiring out of civil engineering plant on its own, which is the letting on hire of goods.
• The secondment of staff to a building site, which is a supply of staff.
• The legal administration of a deceased person’s estate which happens to include property. These are lawyers’ services.
• Advice or information relating to land prices or property markets because they do not relate to specific sites.
• Feasibility studies assessing the potential of particular businesses or business potential in a geographic area. Such services do not relate to a specific property or site.
• Provision of a recording studio where technicians are included as part of the supply. These are engineering services.
• Services of an accountant in simply calculating a tax return from figures provided by a client, even where those figures relate to rental income.

See section 5 if you make B2B supplies of such services. See sections 14 and 15 if you make B2C supplies of such services.

6.6 UK customers receiving services relating to UK land

If you are a UK VAT registered recipient of these services you may be required to account for the reverse charge if your supplier belongs outside the UK. See section 18.

6.7 Non-UK suppliers of services relating to UK land

If you are a supplier who does not belong in the UK, and your customer is not registered for UK VAT, you, as the supplier, are responsible for accounting for any UK VAT due on your supply. If you are not already registered in the UK, you may be liable to register. See paragraph 2.14.

6.8 Liability to register for VAT in other Member States

If you supply services relating to land in another Member State, you may be liable to register for VAT in that Member State. See paragraph 2.16.

7. Services of the hiring of means of transport

The law on services of hiring of means of transport is in the VAT Act Schedule 4A paragraphs 3 and 13A (paragraph 13A is effective on and after 1 January 2013).

Hire of a means of transport includes the hire of ships and aircraft under charter with or without a crew.

For the letting on hire of other goods, see section 5 if you make B2B supplies and sections 14 and 15 if you make B2C supplies.

However, there are additional rules for all hired goods (including letting on hire or leasing means of transport), depending on where they are used and enjoyed (see section 16).

7.1 What is a ‘means of transport’?

To decide whether goods that you hire are means of transport, you must consider the actual structure and design of the hired goods. This objective consideration applies even where the intended, or actual, use of the hired goods may not be as a means of transport. For example, a yacht is a means of transport even if it is to be used for racing, as is a train which may be leased to a transport museum.

7.1.1 Examples of means of transport

• Ships, boats, yachts, hovercraft, barges or dracones (bulk liquid barges).
• Aircraft.
• Cars, trucks, lorries.
• Motorcycles, cycles.
• Touring caravans and trailers.
• Trailers and semi-trailers.
• Railway wagons.

7.1.2 Examples of goods which are not a means of transport

• Freight containers.
• Static caravans.
• Racing cars where the provision of the car forms part of a supply of sporting services (see section 8).

7.2 What are the rules for the place of supply of services of hiring out means of transport?

There are different rules for the place of supply of services of hiring out means of transport depending on who receives the supply and how long the means of transport is hired for.

7.2.1 What is the place of supply of B2B and B2C services of short-term hire of means of transport?

B2B and B2C short-term hiring of means of transport are supplied where the means of transport is put at the disposal of the hiree.

To decide whether you make B2B or B2C supplies see paragraphs 2.5 and 2.6.

7.2.2 What does 'place where the means of transport is put at the disposal of the customer' mean?

The ‘place where the means of transport is put at the disposal of the customer’ means the place where the customer takes actual physical control of the means of transport.

7.2.3 What is short-term and long-term hire of means of transport?

Short-term hire of means of transport is hiring for a continuous period not exceeding 90 days if the means of transport is a vessel and not exceeding 30 days for any other means of transport.

Any hire beyond this period is a long-term hire of means of transport.

To decide whether a particular hire is short or long-term hire you should look at the hire contract(s). See table 2.

7.2.4 Table 2 Short-term or long-term hire of means of transport

When…	if...
two or more separate contracts for the hire of the same means of transport follow each other with two days or less between them, the term of the first contract needs to be considered in order to decide whether the second term is short-term or long-term.	the two contracts together exceed 30 days (or 90 days for vessels) then the second and subsequent consecutive contracts are treated as long-term hires. If the first contract is genuinely of a short-term hire it will remain so.
there is a second separate contract for short-term hire between the same two parties.	that second separate hire contract relates to a different means of transport or the terms of the hire differ significantly, the contracts will need to be considered separately.
a short-term hire contract is extended.	that extension means that it exceeds the 30 or 90 day period the place of supply is determined by the long-term hire rule, unless it can be satisfactorily demonstrated that the circumstances leading to the events were outside the control of the parties involved.

7.2.5 What is the place of supply of B2B services of long-term hire of means of transport?

B2B supplies of long-term hiring of means of transport are subject to the general rule for the place of supply of services and supplied where the recipient/customer belongs. See section 5.

7.2.6 What is the place of supply of B2C services of long-term hire of means of transport?

From 1 January 2010 to 31 December 2012 inclusive, B2C supplies of the long-term hire of means of transport are subject to the B2C general rule for the place of supply of services and are made where the supplier belongs. See section 5.

On or after 1 January 2013 B2C supplies of the long-term hire of means of transport are made where the recipient/customer belongs, unless the hire is long-term hire of a pleasure boat.

7.2.7 On or after 1 January 2013 what is the place of supply of B2C services of long-term hire of a pleasure boat?

On or after 1 January 2013 the place of supply of B2C services of long-term hire of a pleasure boat will be the place where the pleasure boat is put at the disposal of the customer where the service is provided from the supplier’s place of business or fixed establishment in that place.

7.3 Additional rules for hire of means of transport

There are additional rules for any hire of means of transport depending on where the supply is used and enjoyed. See section 16.

7.4 Zero-rating of hired means of transport made in the UK

When supplied in the UK, the hire of certain ships and aircraft is zero rated. See Notice 744C Ships, aircraft and associated services.

8. Services supplied ‘where performed’

The law on ‘where performed’ services is in the VAT Act Schedule 4A paragraphs 4, 9A, 13, 14 and 14A.

8.1 What services are supplied ‘where performed’?

The changes to the place of supply rules for services supplied ‘where performed’ are being introduced in two phases. Table 2 below sets out the changes for B2B and B2C supplies.

8.1.1 Table 3 Changes effective from 1 January 2010 and 1 January 2011

Service description	Place of supply from 1 January 2010	Place of supply from 1 January 2011
Services of work on, or valuation of moveable goods; and ancillary transport services.	B2B supplies are subject to the B2B general rule. See section 5. B2C supplies are made where the services are physically performed.
Services relating to cultural, artistic, sporting, scientific, educational, entertainment or similar activities (including fairs and exhibitions); and ancillary services relating to such activities, including services of organisers of such activities.	B2B and B2C supplies are made where the services are physically carried out.	B2B supplies are subject to the B2B general rule and the place of supply is where the customer belongs. See section 5. B2C supplies are made where the activities actually take place.
B2B supplies of services in respect of admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events (including fairs and exhibitions); and B2B supplies of ancillary services relating to admission to such events.	Supplied where services physically carried out.	The place of supply is where the events actually take place.

Services covered by this section generally relate to a live event or physical activity. You will need to consider the nature of services that you supply, as terms such as entertainment, sponsorship, or scientific may apply to services which fall under other sections.

If you resell services covered by this section, particularly educational services and services connected with conferences and meetings, together with accommodation or travel, see paragraph 2.10.

8.1.2 Examples of services supplied 'where performed'

If you supply these services you should look carefully to see if your supplies are subject to the new B2B general rule, unless your supplies are of admissions services or services related to admissions in which case this section applies. If you make B2C supplies of these services table 3 in paragraph 8.1.1 shows whether your supplies will be affected by the changes effective from 1 January 2010 and 1 January 2011.

• Services of sportspersons appearing in exhibition matches, races or other forms of competition. However, where you receive sponsorship or prize money, you will need to determine whether or not these moneys are received as consideration for a supply. If they are consideration for a supply, the nature of your supply must be determined, see paragraph 8.1.3 and Notice 701/41 Sponsorship.
• Provision of race prepared cars. Such packages include the hire of the car and support services to ensure optimum maintenance and operation of the car throughout a series of races.
• Scientific services of technicians carrying out tests or experiments in order to obtain data. The final compilation of your record of results, carried out in the UK, will not make the supply liable to UK VAT provided your services were otherwise performed outside the UK.
• Services of an actor or singer, whether or not in front of a live audience.
• Services relating to conferences or meetings.
• Services of an oral interpreter at an event, such as a meeting. For other forms of translation services, see paragraph 8.1.3.
• The right to participate in an exhibition or the provision of an undefined site for a stand at an exhibition. See section 6 for defined sites.
• Services relating to a specific exhibition. This includes carpenters and electricians erecting and fitting out stands at exhibition venues.
• Educational and training services. Such services may be exempt when made in the UK, see Notice 701/30 Education and vocational training. See paragraph 8.2 for zero-rating of training performed in the UK for overseas Governments. The following interpretive note determines where flying or sailing training is performed:

Note: Flying training is treated as supplied wholly outside the UK provided the trainer aircraft leaves UK airspace and proceeds directly to a destination abroad, and at least 12 hours’ training is provided at that place. Sailing training is treated as supplied wholly outside the UK provided all of the training is carried out on a vessel which clears UK territorial waters for a foreign destination. Also, it must remain outside UK territorial waters for the whole of the period of training (except for proceeding directly from and returning directly to the UK).

8.1.3 Examples of services that are not supplied ‘where performed’

• Services of sportspersons receiving sponsorship money as consideration for product endorsement or publicity appearances. These are advertising services rather than participation in a sporting event.
• Written translation services or interpreters’ services which do not take place at an event. These are consultancy services.
• The hire of goods without any additional services, even if the customer uses those goods at an exhibition or concert.
• B2B supplies of such services see section 5. For B2C supplies of such services see sections 14 and 15.
• The provision of a defined site for a stand at an exhibition, which is land-related. See section 6.
• Scientific services which include a recommendation or conclusion. These are services of consultancy or provision of information (for B2B supplies of such services see section 5, for B2C supplies of such services see section 14 and paragraph 15.5; or, if connected with oil/gas/mineral exploration or exploitation of specific sites of land or the seabed, they are land-related see section 6).
• Veterinary services. These are general rule services. See section 5.

8.2 Training performed in the UK for overseas Governments

Non-exempt training services supplied in the UK to overseas Governments for the purposes of their sovereign activities can be zero-rated under an extra-statutory concession.

The relief does not apply if services are received for business purposes. It therefore excludes the training of personnel from Government owned industries or sponsored commercial organisations such as state airlines or nationalised industries.

However, such businesses may be able to claim a refund of VAT paid in the UK, see Notice 723 Refunds of VAT in the EC for EC and non-EC businesses.

If you supply training services to foreign or overseas Governments your supply will be zero-rated provided both of the following conditions are met:

• the services must be used by the foreign or overseas Government for the furtherance of its sovereign activities (that is not for business purposes), and
• you must obtain and retain a written statement from the foreign or overseas Government concerned, or its accredited representative, certifying that the trainees are employed in furtherance of its sovereign activities.

8.2.1 What do we mean by ‘foreign or overseas Government’?

‘Foreign or overseas Government’ includes overseas Government officials, public servants and members of organisations such as the armed forces, the police, the emergency services and similar bodies answerable to the Government concerned.

8.2.2 When are training services not zero-rated?

Training services are not zero-rated:

• when the conditions in paragraph 8.2 are not met
• when the training services are provided to personnel from Government-owned businesses or sponsored commercial organisations such as state airlines or nationalised industries, or
• when the training services are exempt from VAT. See Notice 701/30 Education and vocational training for further details.

8.2.3 Does zero-rating extend to associated services?

Zero-rating only applies to the supply of the actual training and does not extend to any associated services which are supplied separately, such as accommodation or transport.

8.3 Exhibition organising

If you supply these services you should look carefully to see if your supplies are subject to the new B2B general rule, unless your supplies are of admissions services or services related to admissions in which case this section applies. If you make B2C supplies of these services table 3 shows whether your supplies will be affected by the changes effective from 1 January 2010 and 1 January 2011.

‘Exhibition organiser’ is a very general description. It covers a variety of services which are performed in different ways. It is important to establish the nature of services rather than relying on how the supply is described. For example:

• if you are an exhibition owner, your services will be of the event itself. Your supplies are likely to be of stand sites, visitor admission or advertising services (such as space in an event publication). Your services will not be ancillary exhibition services as they would not be of organising the event. See sections 5, 6 14 and 15
• if you act as an organiser for an exhibition owner in making all the arrangements for the event on behalf of the owner, your services are ancillary to exhibition services. See table 3
• if you are a representative body assisting exhibitors to attend exhibitions by providing a single package of various services which may include exhibition space obtained from the owner, consultancy, design, provision of displays, transport and stand construction, your services are supplied where they are physically carried out and from 1 January 2011 where the activities or events take place. See table 3.

8.3.1 Representative bodies and exhibitions held in other Member States

If you supply a comprehensive package of services for an exhibition in another Member State, you are supplying services which are performed at the venue. You may be required to account for VAT in that Member State. If you are not required to account for VAT in that Member State and your services are otherwise physically carried out in the UK, your services are supplied in the UK.

8.4 Ancillary services

If you supply these services you should look carefully to see if your supplies are subject to the new B2B general rule from 1 January 2011, unless your supplies are of admissions services or services related to admissions in which case this section applies. If you make B2C supplies of these services table 2 shows whether your supplies will be affected by the changes effective from 1 January 2010 and 1 January 2011.

The place of supply of services which are ancillary to:

• cultural, artistic, sporting, scientific, educational entertainment activities, and
• exhibitions, conferences or meetings

is where those ancillary services are physically carried out and from 1 January 2011 is where the activities actually take place. Ancillary services include the services of organising such supplies.

8.4.1 Examples of ancillary services

• Services of a co-ordinator in administering arrangements for a sporting event on behalf of a promoter.
• Services of lighting or sound technicians at a concert. This also covers the hire of equipment included as part of the same supply. Where equipment is hired separately, see section 5 if you make B2B supplies of such services and sections 14 and 15 if you make B2C supplies of such services.

8.4.2 Examples of services not included as ancillary services

• A supply of advertising services to a sponsor by the promoter/owner of a sporting event.
• The simple hiring of equipment for use at a concert, without the services of technicians or operators.
• section 5 if you make B2B supplies and sections 14 and 15 if you make B2C supplies of such services.
• Certain services which may be described as ‘exhibition organising’. See paragraph 8.3.

8.4.3 Ancillary transport services

See section 5 if you make B2B supplies of ancillary transport services. If you make B2C supplies of such services see section 11.

8.5 Valuation of or work carried out on goods

From 1 January 2010 B2C supplies of valuations of, or work on, another person’s goods are supplied where those services are physically performed. B2B supplies of such services are subject to the B2B general rule. See section 5.

For the purposes of these place of supply provisions, goods must constitute tangible moveable property. See paragraph 8.5.1.

8.5.1 What are 'goods'?

‘Goods’ include all forms of tangible moveable property, covering both finished commodities and raw materials but does not include immoveable property such as permanently installed goods and fixtures. See paragraph 6.3.

8.5.2 What does 'work carried out on goods' mean?

Work carried out on goods is essentially any physical service carried out on another person’s goods. Examples include:

• processing, manufacturing or assembling
• repairs, cleaning or restoration
• alterations, calibrations, insulating, lacquering, painting, polishing, resetting (of jewellery), sharpening, varnishing, waterproofing, and
• nominations to stallions/covering (that is, attempting to secure the pregnancy of mares).

8.5.3 Examples of valuation services or work on goods

• Services of a sub-contractor installing machinery supplied by another person.
• Simple valuation of goods by loss adjusters, average adjusters, motor assessors, surveyors and other experts in connection with an insurance proposal or claim. The final compilation of a related report in a different country from the goods will not change the place of supply from the country where valuation work is performed. However, where valuation forms only a part of your professional services your supplies are of consultancy. See section 5 if you make B2B supplies and sections 14 and 15 if you make B2C supplies of such services.

8.5.4 Examples of supplies which are not valuation services or work on goods

• Work which is not mainly physical work performed on the goods themselves. For example, where inspection, is not ‘work on goods’. It can be ‘valuation’, but only if that is the purpose of the inspection. However, such activities may form part of a consultancy service.
• Testing and analysis of goods. The physical work simply provides data for the required analysis.

See section 5 if you make B2B supplies and sections 14 and 15 if you make B2C supplies of such services.

• Valuation of, or work carried out on, land or property. See section 6.
• Veterinary services. See section 5.

8.5.5 Does zero-rating apply for work on goods?

Certain supplies of work on goods (but not valuation of goods) for export from the EC are zero-rated when made in the UK. See section 4 and paragraph 8.6. Zero-rating is also available for certain processing services relating to zero-rated goods.

8.6 Zero-rating of work on goods for export from the EC

The law relating to the zero-rating of work on goods for export from the EC is in the VAT Act, Schedule 8, Group 7 Item 1.

Work on goods for export from the EC is zero-rated provided that all of the following conditions are met:

• the goods on which the work is to be carried out, must have been obtained, acquired within, or imported into the EC for the purposes of being worked on, and
• the goods must not be used in the UK between the time of leaving the supplier’s premises and exportation, and
• on completion of the work, the goods are intended to be and, in fact are, exported from the EC either:

• by you, the supplier of the service, (or someone acting on your behalf), or
• if your customer belongs outside the EC, by your customer (or someone acting on your customer’s behalf). See section 3 for guidance on place of belonging.

8.6.1 Examples of work on goods which may qualify for zero-rating under this section

• Alterations and repairs, calibrations, cleaning, insulating, lacquering, painting, polishing, resetting (jewellery), cutting (of precious stones), sharpening, varnishing and waterproofing.
• The repair of freight containers.
• Services relating directly to the ‘covering’ (that is, attempting to secure the pregnancy) of a mare, provided the mare is exported before the birth of the foal.
• The gelding and/or breaking in of young horses (for example training yearling racehorses to the stage where they can be ridden safely in races). However, actual racing is not accepted as training and if any horse is acquired or temporarily imported with the intention of racing it in the EC before re-export, zero-rating will not apply.
• The restoration of classic cars.

8.6.2 Examples of services which do not qualify for zero-rating under this section

• Work which is not physical work carried out on the goods themselves (for example, mere inspection of goods or testing and analysis of goods is not ‘work on goods’).
• Repair or other work which becomes necessary in the EC after acquisition or importation of goods, such as incidental running repairs, while the goods are being used (even though they may be subsequently exported).
• Valuation services.

8.6.3 How do I treat goods supplied with my services?

Any goods used in conjunction with the work performed, such as spare parts, paint, and so on, should be treated as part of the supply of services.

8.6.4 What export evidence do I need?

In order to zero-rate a supply of such services you must obtain and keep satisfactory official or commercial evidence of the export of the goods to a place outside the EC.

Examples of acceptable evidence of export are contained in Notice 703 VAT: Export of goods from the United Kingdom.

If, in anticipation of export to a place outside the EC, you zero-rate your supply under this item but, in the event, the goods are used in the EC before export or export does not take place, you will need to reconsider both the place of supply of your services and, if it is the UK, the appropriate VAT rate that applies.

8.7 UK customers receiving ‘where performed’ services made in the UK

If you are a UK VAT registered recipient of a ‘where performed’ service which is performed in the UK you may be required to account for any UK VAT due under the reverse charge procedure if your supplier belongs outside the UK. See section 18.

8.8 Non-UK suppliers of 'where performed' services made in the UK

If you are a supplier who does not belong in the UK, and your customer is not registered for UK VAT, you, as the supplier, are responsible for accounting for any UK VAT due on your ‘where performed’ supply if it is supplied in the UK. If you are not already registered in the UK, you may be liable to register. See paragraph 2.14.

8.9 Could I be liable to register in other Member States?

If you supply ‘where performed’ services and the place of supply is in another Member State, you may be liable to register for VAT in that Member State. See paragraph 2.16.

9. Restaurant and catering services

The law on the place of supply of restaurant and catering services is in the VAT Act Schedule 4A paragraphs 5 and 6.

9.1 Place of supply of restaurant and catering services

The place of supply of restaurant and catering services is where the services are physically carried out.

There is a separate rule for EC on-board restaurant and catering services. See paragraph 9.2.

9.2 Place of supply of EC on-board restaurant and catering services

The place of supply of EC on-board restaurant and catering services supplied on a ship, aircraft or train for the transportation of passengers on an intra-EC journey is the Member State of departure.

10. Passenger transport

The law on the place of supply of passenger transport is in the VAT Act Schedule 4A paragraph 2.

10.1 Place of supply of passenger transport

The place of supply of passenger transport is where it takes place. Therefore where passenger transport takes place in the UK, the UK is the place of supply. Special rules apply to some transport that leaves and re-enters the UK. See paragraph 10.2.

To the extent that such transport takes place outside the UK, it is outside the scope of UK VAT, except where paragraph 10.2 applies. However, if a journey involves travel through another Member State, the supply of passenger transport will be made in that Member State to the extent that the transport takes place there.

See Notice 744A Passenger Transport for detailed guidance on the VAT treatment of passenger transport. This notice also describes the VAT treatment of passenger transport supplied in the UK by non-UK suppliers.

If you supply bought-in supplies of passenger transport, or provide passenger transport together with other bought-in supplies, such as hotel accommodation, for the direct benefit of a traveller, see paragraph 2.10.

10.2 What are the special rules for passenger transport that leaves and re-enters the UK?

The special rules are that provided the ship, aircraft or vehicle does not put in, land or stop (except in an emergency or involuntarily) in any other country, journeys which begin and end in the same country, but take place partly outside that country, are treated as taking place wholly within that country. This applies even if the journey is part of a longer journey involving travel to or from another country.

10.3 Zero-rating of intermediary services made in the UK

Some supplies of intermediaries are zero-rated when supplied in the UK. See section 12 and Notices:

• 744A Passenger Transport; and
• 709/6 Travel agents and tour operators.

11. B2C supplies of freight transport related services

The law on B2C supplies of freight transport and related services is in the VAT Act Schedule 4A paragraphs 11 and 12.

11.1 What does this section cover?

This section is intended to give only a basic overview of the VAT treatment of B2C supplies of freight transport and related services. B2B supplies of freight transport and related services fall under the B2B general rule (see section 5). The table below outlines the main categories of these types of services and gives a general indication as to where the place of supply is. However, for full and detailed guidance on the VAT treatment of such services you should refer to Notice 744B Freight transport and associated services.

If the type of supply is:	the place of supply will be:
B2C domestic freight transport (which takes place wholly within one country);	where the transport takes place.
B2C international freight transport (between the EC and non-EC countries, or wholly outside the EC);	where the transport takes place.
B2C intra-EC freight transport (from one Member State to another);	the Member State in which the transportation begins.
B2C ancillary transport services relating to domestic, international freight transport or intra-EC freight transport;	where the services are physically performed.
making arrangements for or facilitation of B2C domestic or international freight transport;	where the transport takes place.
making arrangements for or facilitation of B2C intra-EC freight transport;	the Member State in which the transportation begins.
making arrangements for or facilitation of related B2C ancillary services;	where the ancillary services are physically performed.

11.2 Zero-rating of intermediary services made in the UK

Some supplies of intermediary services are zero-rated when supplied in the UK. See section 13 and Notices:

• 744B Freight transport and associated services, and

12. B2C intermediary services

The law on B2C intermediary services covered by this section is in the VAT Act Schedule 4A paragraph 10. Most B2B intermediary services fall under the B2B general rule, see section 5.

12.1 When am I an intermediary for the purposes of this section?

You are an intermediary for the purposes of this section if you act as a third party in arranging, or even simply facilitating, the making of supplies. An intermediary arranges supplies between two other parties; a supplier and that supplier’s customer. Intermediaries may be referred to as brokers, buying or selling agents, go-betweens, commissionaires or agents acting in their own name (undisclosed agents). Payments for their services are often described as commission.

In this section, your customer is the person to whom you supply your intermediary services. This can be either the supplier or the recipient of the arranged supply (and in some cases may even be both).

12.2 Are all intermediary services covered by this section?

Not all intermediary services are covered by this section. Most B2B intermediary services fall under the B2B general rule and are supplied where the customer belongs, see section 5.

12.3 What determines the place of supply of intermediary services in this section?

The place of supply of your intermediary services is where the underlying arranged supply is made.

12.4 How do I establish the place of supply of arranged supplies of services?

You can establish the place of supply of arranged supplies of services by referring to the appropriate section of this notice.

Type of arranged supply:	For further information see:
hired means of transport;	sections 5 and 7;
land-related services;	section 6;
‘where performed’ services;	section 8;
restaurant and catering services;	section 9;
passenger transport, B2C domestic or international freight transport;	sections 10 and 11;
B2C services supplied where the customer belongs;	sections 14 and 15;
general rule services;	section 5.

12.5 How do I establish the place of supply of arranged supplies of goods?

The place of supply of arranged supplies of goods is determined by the place of supply of the underlying supply of goods. The place of supply of goods is generally where the goods are located when they are supplied. However, there are special rules for imported goods (from outside the EC) and installed or assembled goods:

• the place of supply of goods imported by the supplier is the Member State of importation
• the place of supply of goods imported by the customer is outside the EC
• the place of supply of installed or assembled goods is where they are installed or assembled.

See Notice 700 The VAT Guide for detailed guidance on the place of supply of goods.

12.6 Intermediary services supplied in the UK

If you are an intermediary and the place of supply of your arranging service is the UK, but the place of supply of the service being arranged is outside the EC, your supply in the UK can be zero-rated. See section 13. This does not include banking, financial and insurance services which are exempt in the UK.

13. Zero-rating of intermediary services made in the UK

The law on zero-rating of certain intermediary services made in the UK is in the VAT Act Schedule 8 Group 7 Item 2.

13.1 When should I consider whether zero-rating applies to my intermediary services?

If you have established that the place of supply of your intermediary services is the UK you should then consider whether zero-rating applies.

You can zero-rate the supply of the making of arrangements for:

• the export of any goods to a place outside the Member States
• a supply of services which is itself zero-rated as work on goods for export from the EC. See paragraph 8.6, or
• any supply of services which is made outside the Member States.

Zero-rating under these provisions only applies to the actual making of arrangements for eligible supplies. It does not extend to services which simply facilitate supplies.

For further information see section 4, paragraph 8.6 and Notices:

• 744A Passenger Transport
• 744B Freight transport and associated services
• 744C Ships, aircraft and associated services, and
• 709/6 Travel agents and tour operators.

13.1.1 Examples of zero-rated intermediary services

• If you obtain an order from an overseas buyer of UK-produced goods, and those goods are actually exported from the EC, your supply of services to the UK exporter or the overseas buyer is zero-rated. You must obtain valid evidence of export. See Notice 703 Export of goods from the United Kingdom.
• If you arrange for a person in the UK to provide a repair service, which is itself zero-rated under the VAT Act, Schedule 8, Group 7, Item 1, your supply is also zero-rated. See paragraph 8.6.
• If you arrange for a person who belongs in the UK to supply consultancy services to a person who belongs in Canada, your supply to the UK consultant is zero-rated. This is because the place of supply of the consultancy service is outside the EC – where the customer belongs – Canada. Therefore, you are arranging a supply that is made outside the Member States. See sections 5,14 and 15 for guidance on the place of supply of consultancy type services.

13.1.2 Examples of intermediary services which are not zero-rated

• The making of arrangements for the supply of exempt insurance or finance. See Notices 701/36 Insurance and 701/49 Finance and Securities.
• The making of arrangements for a supply of freight transport is not zero-rated under this provision. However, it may be eligible for zero-rating under a different provision, see Notice 744B Freight transport and associated services.
• Services supplied by a person acting as a principal, even if their trading title or classification includes the word ‘agent’ or ‘agency’.
• If you act as an intermediary in arranging a supply of services within the EC.
• If you arrange for a supply of goods which are supplied within the EC, and those goods remain in the EC. See Notice 700 The VAT Guide for information on the place of supply of goods and Notice 725 The single market.

13.2 Am I liable to register for VAT if the place of supply of my services is the UK?

If you make taxable supplies in the UK above the registration threshold, you are liable to register for VAT. However, if all of your supplies are zero-rated you may apply for exemption from registration. If the value of your supplies is below the threshold you may also register on a voluntary basis. Further information on all matters relating to VAT registration can be found in Notice 700/1 Should I be registered for VAT?

13.3 Non-UK intermediaries arranging supplies made in the UK

If you are a non-UK intermediary arranging a supply which is supplied in the UK and your customer is not UK VAT registered, you, as the supplier, are responsible for accounting for any UK VAT due on your supply. If you are not already registered in the UK, you may be liable to register. See paragraph 2.14.

13.4 Liability to register in other Member States

If you supply services of arranging a supply which is supplied in another Member State and your customer is not EC VAT registered, you may be liable to register for VAT in that Member State. See paragraph 2.16.

14. B2C services supplied where the customer belongs

The law on B2C services supplied in a customer’s country is in the VAT Act Schedule 4A paragraph 16.

14.1 When do I need to refer to this section?

You need to refer to this section if you belong in the UK and supply services in section 15. If you are unsure whether you belong in the UK, see section 3.

See section 20 for electronically supplied services where the supplier belongs outside the EC.

14.2 What do I need to know to decide if my services fall under this section?

You need to know:

• whether your services are covered by section 15
• who your customer is (that is, who is the recipient of your supply), and
• where your customer belongs for the purposes of receiving your supply. See section 3.

14.3 What is the place of supply of my services if my customer belongs outside the EC?

If, as a UK supplier, you make B2C supplies of any of the services in section 15 to a customer who belongs outside the EC, your services are supplied in your customer’s country and are outside the scope of VAT. B2C supplies are explained in paragraph 2.6.

However, there are additional rules for the B2C letting on hire of goods, telecommunications services and radio and television broadcasting services (see section 16).

14.3.1 Example of a supply of services supplied outside the EC

• If you supply accountancy services to a private individual who belongs in the Channel Islands, the place of supply of your services is outside the EC. This is because your customer belongs outside the EC. You should not charge VAT.

14.4 How do I satisfy myself that this section applies?

To satisfy yourself that this section applies you should obtain sufficient factual evidence showing that your customer belongs outside the EC.

14.5 When does this section not apply?

This section does not apply if:

• you cannot determine where your customer belongs
• your customer belongs in the UK, or
• your customer belongs in another Member State.

In such cases and provided the additional rules for the letting on hire of goods, telecommunications services and radio and television broadcasting services do not apply (see paragraph 14.6) your supplies are subject to the B2C general rule and are supplied in the UK. See section 5.

14.6 What are the additional place of supply rules for letting on hire of goods, telecommunications services, radio and television broadcasting services?

Paragraphs 14.3 and 14.4 apply to B2C supplies of letting on hire of goods, telecommunications services and radio and television broadcasting services unless these services are:

• received by a customer belonging outside the EC but the services are used in the UK, or
• received by a UK customer, or a customer in another Member State, but the services are used outside the EC.

In these cases you can establish the place of supply by referring to the appropriate section of this notice.

Description of service:	Dealt with in:
letting on hire of goods;	sections 16 and 22;
telecommunications services;	sections 16 and 22;
radio and television broadcasting services;	sections 16 and 22.

14.7 Zero-rating of intermediary services made in the UK

If your services of the making of arrangements for supplies of services (which are themselves made outside the EC) are supplied in the UK, they can be zero-rated. See section 13. This does not include banking, financial and insurance services which are exempt in the UK.

15. Schedule 4A, paragraph 16(2)(a)-(k) – B2C services that can be supplied in a customer’s country

The law which lists the services that can be supplied in a customer’s country is in the VAT Act, Schedule 4A, paragraph 16(2)(a)-(k).

Remember, this section covers a list of services. It does not determine where supplies of these services are made.

When these services are made by UK suppliers, see section 14.

15.1 What kind of services are covered by this section?

The common feature of services covered by this section is that their place of performance can be indeterminate or variable and they are easily undertaken in a different place to where a supplier has established a business. They are often intangible in nature.

15.2 Paragraph 16(2)(a) of Schedule 4A: Transfers and assignments of copyright, patents, licences, trademarks and similar rights

15.2.1 What types of services fall within paragraph 16(2)(a)?

This paragraph covers transfers, assignments and grants of copyright, patents, licences, trademarks and other similar rights. Similar rights are intellectual property rights which are capable of being legally enforced. Payments for these intellectual rights are often known as ‘royalties’. They can be made on a regular and continuing basis or take the form of a single, one-off fee. Services which do not involve intellectual property are not covered even though they may be described as a right or licence.

15.2.2 Examples of services within paragraph 16(2)(a)

• The granting of a licence to use computer software.
• The transfer of permission to use a logo.
• The granting of a right by a photographer for one of his photographs to be published in a magazine article. This includes material which is digitally downloaded to the customer.

15.2.3 Examples of exclusions from paragraph 16(2)(a)

• The supply of individual shares in goods, for example an animal or yacht, even though certain rights may be included in the supply.
• The supply of a right to obtain reduced rates for admission to conferences and meetings as well as similar discounts on facilities available to members of clubs, associations or societies in return for a subscription.
• The supply of the right to occupy land or property including hotel accommodation. See section 6.
• The granting of a right to a future supply of a service. The place of supply of that right will be the same place as the underlying supply to which the right relates. This will be the case even in situations where the right is never exercised. A right to services includes a reference to any right, option or priority with respect to the supply of services and to the supply of an interest deriving from any right to services.

15.3 Paragraph 16(2)(b) of Schedule 4A: Acceptance of any obligation to refrain from pursuing or exercising, in whole or part, any business activity or any such rights as are referred to in paragraph 16(2)(a) above

15.3.1 What types of services fall within paragraph 16(2)(b)?

This paragraph covers entering into agreements not to pursue or undertake any business activity and refraining from exercising, or relinquishing, those rights covered by paragraph 16(2)(a) of Schedule 4A. See paragraph 15.2.

15.3.2 Examples of services within paragraph 16(2)(b)

• The vendor of a business accepting an undertaking not to compete with the purchaser.
• Agreement by the owner of a trademark to refrain from using it.

15.4 Paragraph 16(2)(c) of Schedule 4A: Advertising services

15.4.1 What types of services fall within paragraph 16(2)(c)?

This paragraph covers all services of publicising another person’s name or products with a view to encouraging their sale. It includes supplies of advertising services in the established media: for example, of radio or television advertising time; of the right to place an advertisement on a hoarding; or of advertising space in any publication. It also covers newer promotional methods such as an entry in a telephone enquiry directory or advertising space in any electronic location.

Advertising or promotional messages may be disseminated in numerous ways. This paragraph covers everything provided as part of an advertising campaign, even if elements of the campaign would have fallen under other place of supply rules had they been supplied in isolation.

15.4.2 Example of advertising services

• Website advertising.

15.4.3 Example of an exclusion from advertising services

• The provision of space or stands at a trade fair or exhibition. See sections 6 and 8.

15.5 Paragraph 16(2)(d) of Schedule 4A: Services of consultants, engineers, consultancy bureaux, lawyers, accountants, and other similar services; data processing and provision of information, other than any services relating to land

15.5.1 What types of services fall within paragraph 16(2)(d)?

This paragraph covers a wide range of services of different natures. It covers services of consultants, engineers, consultancy bureaux, lawyers and accountants as well as other services which are similar to them. Data processing services and the provision of information are also included. It does not matter how supplies of these services are delivered to a customer, which may be by electronic transmission, courier or mail. However, where any of these services relate to land or property they are excluded from paragraph 16(2)(d) of Schedule 4A. See section 6.

15.5.2 What are services of consultants and consultancy bureaux?

Services of consultants and consultancy bureaux cover the normal services of experts in all professional areas who act in an accepted professional or advisory capacity. Examples include:

• research and development
• market research
• written translation services or interpreters’ services which do not take place at an event, such as interpreting services for a telephone conference. See section 8 for oral interpreting at an event
• testing and analysis of goods (for example, drugs, chemicals and domestic electrical appliances). The essential nature of such services is analysis by experts who use the results of the testing to reach a professional conclusion, such as whether goods meet specified standards
• writing scientific reports
• production of customised (‘bespoke’ or ‘specific’) computer software, excluding digitally downloaded software, as well as the services of adapting existing packages. However, some ‘off-the-shelf’ software packages are treated as supplies of goods, and
• software maintenance involving upgrades, advice and resolving any problems. The place of performance is not relevant as solutions may be provided by telephone conversations, remote links or attending a mainframe site. However, a contract for simply maintaining computer hardware relates to work on goods. See section 8.

15.5.3 Examples of exclusions from services of consultants and consultancy bureaux

• Services of consultants and consultancy bureaux are excluded from paragraph 16(2)(d) of Schedule 4A if they relate to specific land or property.
• Supplies described as management services, unless they can be shown to be essentially of consultancy services. However, such services may fall elsewhere within paragraph 16(2)(d) of Schedule 4A.
• Clerical or secretarial services, the provision of office facilities and archiving services. See section 5.
• Services provided by a consultant which are outside the supplier’s

15.5.4 What are services of engineers?

Services of engineers cover engineering design or consultancy services. Engineers generally, but not always, possess formal qualifications. The services must be of a type expected of an expert or professional. Examples include:

• the provision of intellectual engineering advice or design. This includes overseeing the resultant physical work, provided that any such supervision is merely to ensure that the design or other advice is properly implemented, and
• services of engineers/technicians within the entertainment industry. This covers editors and sound engineers producing an edit master from which copies can be made (films, videos, compact discs or audio tapes) as well as those who exercise a degree of artistic control or influence over material.

15.5.5 Examples of exclusions from services of engineers

• Services of surveyors and consultants consisting primarily of work such as design, surveying, site supervision or valuation where these directly relate to land or property. See section 6.
• Services carried out by an engineer which consist wholly or mainly of physical work on goods, including installation of goods. See section 8.

15.5.6 What are services of lawyers and accountants?

Services of lawyers and accountants include services normally provided by lawyers, accountants, solicitors, barristers or auditors in their professional capacities, except where those services directly relate to land or property. See section 6. Examples include:

• legal and accountancy services in the general administration or winding up of a deceased’s estate even if that estate includes land or property. Such supplies are not made to beneficiaries but to the estate. This is seen as whoever is appointed executor or administrator, although they may also be a beneficiary, and
• services described as management services, the essential nature of which comprise accountancy or legal services.

15.5.7 Examples of exclusions from services of lawyers and accountants

• Services consisting primarily of work which directly relates to land or property, such as:

• property management
• conveyancing
• obtaining planning consent, or
• a claim of ownership over a particular piece of land or property. See section 6.

• Clerical or secretarial services, which includes the keeping of financial records. See section 5.

15.5.8 What are similar services?

Similar services include services which are similar to those normally provided by consultants, consultancy bureaux, engineers, lawyers, and accountants. Examples include:

• services of loss adjusters and assessors in assessing the validity of claims (except when these services relate to land). Such services may include examination of goods to establish a value for damage or deterioration as well as negotiating a settlement amount
• services of surveyors, providing opinions which do not relate to specific sites
• architects’ services where there is no specific site of land. See section 6
• design services
• services of specialists or technicians which are essentially creative or artistic in nature, and
• services of film directors or producers, where their services are not of rights already covered by paragraph 16(2)(a) of Schedule 4A. See paragraph 15.2.

15.5.9 Examples of exclusions from similar services

• Services provided by architects and surveyors which directly relate to land or property. This includes surveying, site supervision, conveyancing, valuation and obtaining planning consent. See section 6.
• Loss adjusting services in relation to claims on land or property (see section 6) and services provided by a loss adjuster which are simply the valuation of goods (see section 8).

15.5.10 What is data processing?

For the purposes of paragraph 16(2)(d) of Schedule 4A, data processing is the application of programmed instructions on existing data which results in the production of required information.

15.5.11 Examples of exclusions from data processing

• Services which simply include an element of data processing. Where this is simply required for a contract to be completed, the nature of the actual contracted services determines which place of supply rule applies.
• Processing data from seismic surveys where the computer analysis relates to a specified area of land or seabed. See section 6.
• Simple re-formatting where there is no change to the meaning of the content.

15.5.12 What is provision of information?

Provision of information covers the supplying of knowledge of any type and in any form. Information includes facts, data, figures and other material. Examples include:

• tourist information
• weather forecasts
• information supplied by a private enquiry agent
• telephone helpdesk services (such as for computer software)
• satellite, navigational and location services, and
• provision of online information.

15.5.13 Examples of exclusions from provision of information

• The delivery or transmission of another person’s information by whatever means. See section 11 for transporting goods and for electronic delivery see paragraphs 15.10 and 15.12.
• Information relating to specific land or property. See section 6.

15.5.14 Does it matter which part of paragraph 16(2)(d) of Schedule 4A applies to a service?

It does not matter which part of paragraph 16(2)(d) of Schedule 4A applies to a service. Provided a supply of services falls within paragraph 16(2)(d) of Schedule 4A it is not necessary to determine which part within paragraph 16(2)(d) of Schedule 4A best describes the supply as the place of supply will be the same.

15.6 Paragraph 16(2)(e) of Schedule 4A: Banking, financial and insurance services (including reinsurance), other than the provision of safe deposit facilities

15.6.1 What types of services fall within paragraph 16(2)(e)?

This paragraph covers all banking, financial and insurance services. Many, but not all, of these are exempt when made in the UK. See Notices 701/36 Insurance and 701/49 Finance.

15.6.2 Examples of banking, financial and insurance services

• Granting of mortgages and loans; selling debts.
• The storage of gold bullion or gold coins by a bank or a dealer in gold who is a subsidiary of a bank.
• The sale of securities as principal.
• The sale of unallocated precious metals (gold, silver, platinum, palladium, rhodium, ruthenium, osmium and iridium) or of unallocated precious metal coins. (Goods are unallocated if they remain an unidentifiable part of a larger stock of goods held by the supplier.)
• Debt collection services.
• Portfolio management services.
• The provision of insurance or reinsurance.
• The supply of financial futures and financial options.
• Trustee services.
• Commodity brokers’ services of arranging transactions in futures and options.

15.6.3 Examples of exclusions from banking, financial and insurance services

• Services of physical safe custody – other than those in paragraph 15.6.2.
• Rent collection services. See section 6.

15.6.4 Securities

Where securities are sold by UK suppliers and the place where the purchaser belongs cannot be determined, you may apply a special rule, known as the ‘easement’. For full details on how this works, you should refer to Notice 701/49 Finance.

15.7 Paragraph 16(2)(f) of Schedule 4A: The provision of access to, and transport or transmission through, natural gas and electricity distribution systems and the provision of other directly linked services

15.7.1 What types of services fall within paragraph 16(2)(f)?

This paragraph covers supplies of services which allow access to, and actual use of, the distribution networks. The distribution systems are the transmission networks of pipelines, cables and interconnectors, which enable the national and international transport of gas and electricity to be carried out. They provide the essential link between producers and consumers of natural gas and electricity within Europe.

Also included are ‘directly linked’ services. These are services which, although not directly involving use of the systems, are clearly an adjunct to such usage.

15.7.2 Examples of services within paragraph 16(2)(f)

• Use of the gas National Transmission System.
• Use of the National Grid.
• Provision of data on network usage.
• Storage of gas within the natural gas distribution system.
• Services involving injection of gas into the system.

15.7.3 Examples of exclusions from paragraph 16(2)(f)

• Balancing and imbalance charges.
• Contract termination payments.
• Fees/subscriptions for membership of regulatory or trade bodies.
• Brokerage fees.

15.8 Paragraph 16(2)(g) of Schedule 4A: The supply of staff

15.8.1 What types of services fall within paragraph 16(2)(g)?

This paragraph covers the supply of staff. A supply of staff is the placing of personnel under the general control and guidance of another party as if they become employees of that other party. You must distinguish between a supply of staff and a supply of other services which you make by using the staff yourself. The latter is not a supply of staff even if you charge by the hour.

When a supplier uses employees to provide whatever service they are contracted to supply (under a contract for services) to a customer, it is not a supply of staff by the supplier but a supply of other services.

15.8.2 Examples of supplies of staff

• If you supply (which may be described as a secondment, transfer or placement) a typist to your customer and that typist comes under their general control and direction as an employee, your supply is of staff.
• The supply, secondment, loan, hire, lease or transfer as principals of personnel for a consideration by bodies such as employment and recruitment businesses, agencies or bureaux.
• The transfer for a fee by a sports club of a professional sportsman who has a contract of service with the club, such as a professional footballer.

15.8.3 Examples of exclusions from supplies of staff

• The supply by a freelancer or other person of a specific service or services under a contract for services. The place of supply will depend on the nature of the services provided.
• Supplies by employment or recruitment businesses or agencies, of making arrangements for the supply of staff between other parties (see section 12).
• If you are a company that employs typists and you supply typing services under a specific typing assignment for a third party using those typists, your service is not a supply of staff but of typing services. See section 5.

15.9 Paragraph 16(2)(h) of Schedule 4A: The letting on hire of goods other than means of transport

15.9.1 What types of services fall within paragraph 16(2)(h)?

This paragraph covers the letting on hire, or leasing, of all goods other than those which are a means of transport (see sections 5 and 7). Goods include all forms of moveable property but exclude land and property or equipment and machinery installed as a fixture.

This paragraph does not cover supplies of the letting on hire or leasing of goods where the services of an operator or technician are included. In such cases the place of supply of such services depends on the nature of the services provided.

15.9.2 Examples of services of the letting on hire of goods other than means of transport

• The hire of mobile telephone handsets. See paragraph 15.11 if the supply is of telecommunications services.
• The hire of freight containers. See paragraph 15.9.5 for additional rules.
• The hire of computer and office equipment.
• The hire of exhibition stand furniture and equipment without any other services.

15.9.3 Examples of exclusions from services of the letting on hire of goods other than means of transport

• The hire of exhibition stand space. See sections 6 and 8.
• The hire of a means of transport - including the leasing or hiring out of cars. See sections 5 and 7.

15.9.4 Additional rules for goods on hire

In addition to the rules in section 14 covering B2C supplies made to overseas customers, there are additional rules for the letting on hire of goods, depending on where they are used and enjoyed. See sections 16 and 22.

15.9.5 Zero-rating for container exports

Containers which are exported from the EC are zero-rated whether they are supplied on hire or by outright sale. See Notice 703/1 Supply of freight containers for export or removal from the United Kingdom.

15.10 Paragraph 16(2)(i) of Schedule 4A: Telecommunications services

15.10.1 What types of services fall within paragraph 16(2)(i)?

Telecommunications services means services relating to the transmission, emission or reception of signals, writing, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems, including:

• the related transfer or assignment of the right to use capacity for such transmission, emission or reception, and
• the provision of access to global information networks.

This paragraph covers the sending or receiving of material by electronic or similar communications systems. This may be via cable, fibre optics, radio waves, microwaves, satellite, or copper wire and covers telephony (systems for transmission of speech and other sounds) and telegraphy (systems for providing distant reproduction of written, printed or pictorial matter) as well as the right to use such facilities.

If you simply supply the ‘content’ of a transmission, you should identify the actual nature of the services provided. For example, a weather forecasting service where weather charts are faxed to the customer is a supply of delivered information and not transmission. See paragraph 15.5.12.

15.10.2 Examples of telecommunications services

• Telephone calls, calls delivered by cellular phones, paging, the transmission element of Electronic Data Interchange, teleconferencing and call-back services.
• Switching, completion of another provider’s calls, the provision of leased lines and circuits or global networks.
• Telex, facsimile, multi-messaging.
• Email and access to the Internet.
• Satellite transmission services, covering transponder rental/hire and both space segments and earth segments, which includes uplinks and downlinks via land earth stations, coastal stations, outside broadcasting units, or similar.
• Transmission or delivery of another person’s material by electronic means.

15.10.3 Examples of exclusions from telecommunications services

• Supplies of information ordered and delivered through the Internet. See paragraph 15.5.12.
• Travel information accessed by telephone. See paragraph 15.5.12.
• Granting copyright to use transmitted material. See paragraph 15.2.1.
• Processing of data. See paragraph 15.5.10.
• Broadcasting to subscribers. See paragraph 15.11.

15.10.4 Do Internet services constitute telecommunications services?

Access to the Internet and World Wide Web, the provision of email addresses and chatline facilities are telecommunications services. If you supply basic access to the Internet, even if related software, some information and customer support facilities are included, your supply is of telecommunications services.

However:

• if you supply a package of Internet services where the emphasis is on content rather than communication, your supply is not of pure telecommunications services. The place of supply of such a package depends on the nature of the services provided, or
• if you supply services separately or services which are simply delivered to a customer by electronic transmission, the place of supply depends on the nature of the services provided.

15.10.5 Additional rules for telecommunications services

In addition to the rules in section 14 covering B2C supplies made to overseas customers, there are additional rules for telecommunications services depending on where they are used and enjoyed. See sections 16 and 22.

15.11 Paragraph 16(2)(j) of Schedule 4A: Radio and television broadcasting services

15.11.1 What types of services fall within paragraph 16(2)(j)?

This paragraph covers services of broadcasting by audio and video signals, regardless of the means used (for example landline, line of sight or satellite link).

15.11.2 Example of radio and television broadcasting services

Subscription for satellite or cable television.

15.11.3 Example of exclusion from radio and television broadcasting services

Service of transmitting another person’s material by electronic means.

15.11.4 Additional rules for radio and television broadcasting services

In addition to the rules in section 14 covering B2C supplies made to overseas customers, there are additional rules for radio and television broadcasting services, depending on where they are used and enjoyed. See sections 16 and 22.

15.12 Paragraph 16(2)(k) of Schedule 4A: Electronically supplied services

15.12.1 What types of services fall within paragraph 16(2)(k)?

This paragraph covers a service:

• delivered over the Internet or an electronic network (in other words is reliant on the Internet or similar network for its provision), and
• where the nature of the particular service means it is heavily dependent on information technology for its supply. In other words the service is essentially automated, involving minimal human intervention and in the absence of information technology does not have viability.

In general the use of the Internet or other electronic networks by parties to communicate with respect to transactions or to facilitate trading does not, any more than the use of a telephone or fax, affect the VAT treatment. For example, where parties simply use the Internet to convey information in the course of a business transaction (for example email), this does not change the nature of that transaction. This differs from a supply that is completely dependent on the Internet in order to be carried out (for example searching and retrieving information from a database with no human intervention).

15.12.2 Examples of electronically supplied services

• Website supply or web hosting services.
• Distance maintenance of programmes and equipment.
• Supplies of software and updating thereof.
• Supplies of images, text and information and making available of databases.
• Supply of music, films and games, including games of chance and gambling games and of political, cultural, artistic, sporting, scientific, educational or entertainment broadcasts of events.
• Supply of distance teaching.

15.12.3 Examples of exclusions from electronically supplied services

• Supplies of goods, where the order and processing is done electronically.
• Supplies of CD-Roms, games on a CD-Rom, floppy disks and similar tangible media.
• Supplies of printed matter, such as books, newsletters, newspapers or journals.
• Supplies of CDs, audio cassettes, videos cassettes, DVDs.
• Services of lawyers and financial consultants and so on, who advise clients through email.
• Teaching services, where the course content is delivered by a teacher over the Internet or an electronic network (in other words, via a remote link).
• Offline physical repair services of computer equipment.
• Offline data warehousing services.
• Advertising services, in particular as in newspapers, on posters and on television.
• Telephone helpdesk services.
• Teaching services purely involving correspondence courses, such as postal courses.
• Conventional auctioneers’ services reliant on direct human intervention, irrespective of how bids are made.
• Telephone services with a video component, otherwise known as videophone services.
• Internet and worldwide web access services. See paragraph 15.10.4.
• Telephone services provided through the Internet.

15.12.4 VAT treatment of downloaded publications

For VAT and duty purposes, all supplies of downloaded publications are regarded as supplies of services and not goods. The UK VAT relief of zero-rating of supplies of printed matter does not apply because the relief is for goods and not services.

15.13 Emissions allowances

B2B supplies of trading in emissions allowances or instruments are subject to the B2B general rule, see section 5. B2C supplies of such services supplied by a UK supplier to a customer belonging outside the EC are supplied where the customer belongs under paragraph 16 of Schedule 4A of the VAT Act. B2C supplies of such services supplied by a UK supplier to a customer belonging either in the UK or in another Member State will continue to be taxed where the supplier belongs, under the B2C general rule, see section 5.

Emissions allowances under the EU Emissions Trading Scheme (EU ETS), and instruments representing emission reductions, carbon credits, and certificates that identify that the production of energy has been generated from renewable sources include, but are not limited to, Certified Emissions Reductions (CERs), Renewal Obligation Certificates (ROCs), Emission Reduction Units (ERUs), Levy Exemption Certificates (LECs), Assigned Amount Units (AAUs), EU Allowances (EUAs) and Renewable Energy Certificates.

Verified Emission Reductions (VERs) are currently considered to be outside the scope of VAT.

Where certificates or instruments are sold with goods or services they will usually be viewed as incidental or ancillary to the main supply. An example of this is where a guarantee of origin is issued to customers purchasing electricity that certifies the electricity was generated from renewable sources.

16. Use and enjoyment of letting on hire of goods, telecommunications services and radio and television broadcasting services

The law on use and enjoyment of the letting on hire of goods, telecommunications services and radio and television broadcasting services is in the VAT Act Schedule 4A paragraphs 3, 7 and 8.

For definitions of these services see:

• section 7 – means of transport
• paragraph 15.9 – services of the letting on hire or leasing of goods other than means of transport;
• paragraph 15.10 – telecommunications services, and
• paragraph 15.11 – radio and television broadcasting services.

16.1 When do the additional rules for letting on hire of goods, telecommunications services and radio and television broadcasting services apply?

The additional rules for letting on hire of goods, telecommunications services and radio and television broadcasting services apply in either of the following situations:

• the place of supply would be the UK under another section (because the supplier or customer belongs in the UK) but the services are effectively used and enjoyed outside the EC, or
• the place of supply would be outside the EC under another section (because the supplier or customer belongs outside the EC) but the services are effectively used and enjoyed in the UK.

In these circumstances, the place of supply is where their effective use and enjoyment takes place. Where this is the UK, the services are subject to UK VAT.

16.2 What do I need to know to decide whether these rules apply?

In order to decide whether these rules apply you need to know:

• where the supplier and customer belong, and
• the place where the services are effectively used and enjoyed.

16.3 Does it always matter where the letting on hire of goods, telecommunications services and radio and television broadcasting services are effectively used and enjoyed?

It does not always matter where the letting on hire of goods, telecommunications services and radio and television broadcasting services are effectively used and enjoyed.

It only matters in the situations described in paragraph 16.1. The use and enjoyment provisions apply where the EC position would otherwise be distortive. Consequently, they do not apply where:

• the place of supply is the UK (because either the supplier or the customer belongs in the UK) and the service was effectively used and enjoyed in another Member State, or
• the place of supply is another Member State (because either the supplier or the customer belongs there) but the supply is effectively used and enjoyed in the UK.

16.4 What does effective use and enjoyment of the letting on hire of goods (including hired means of transport) mean?

Effective use and enjoyment takes place where the hired goods are used (in practice this will be where the goods are physically located) irrespective of contract, payment or beneficial interest.

16.5 Use and enjoyment of hired means of transport

If you (as lessor) hire out a means of transport where the place of supply would be the UK but the means of transport is used and enjoyed outside the EC during the hiring period, the place of supply of your services is outside the EC to the extent that the use and enjoyment takes place outside the EC. You will need to retain evidence to substantiate such use and enjoyment.

Similarly, if you (as lessor) hire out a means of transport where the place of supply would be outside the EC but the means of transport is used and enjoyed in the UK during the hiring period, the place of supply of your services is the UK to the extent that the use and enjoyment takes place within the UK.

16.5.1 Examples for hired means of transport

If you	the place of supply of your services is
hire out a means of transport where the place of supply is the UK which is used and enjoyed within the EC,	the UK.
hire out a means of transport where the place of supply is the UK which is used and enjoyed outside the EC throughout the hiring period,	outside the EC.
hire out a means of transport where the place of supply is the UK which is used and enjoyed partly within and partly outside the EC during the hiring period,	the UK to the extent that the means of transport is used and enjoyed in the EC.
hire out a means of transport where the place of supply is outside the EC which is used and enjoyed within the UK for the whole duration of the hiring period,	the UK.
hire out a means of transport where the place of supply is outside the EC which is used and enjoyed partly within the UK during the hiring period,	the UK to the extent that the means of transport is used and enjoyed in the UK.

16.6 Use and enjoyment of the letting on hire of goods (other than means of transport)

If the place of supply of your services would be the UK under sections 5 or 14, and the goods are used and enjoyed outside the EC during the hiring period, your services are supplied outside the EC to the extent that the effective use and enjoyment takes place outside the EC. You will need to retain evidence to substantiate such use and enjoyment.

If the place of supply of your services would be outside the EC under sections 5 or 14, and the goods are used and enjoyed in the UK during the hiring period, your services are supplied in the UK to the extent that the effective use and enjoyment takes place in the UK.

16.6.1 Examples for hired goods other than means of transport

• A Canadian company hires out recording equipment to a UK private individual who uses the equipment in his UK home. The place of supply is the UK. This is because the goods are used and enjoyed in the UK and the place of supply would otherwise have been outside the EC. See section 5.
• An Australian tourist hires a video camera from a UK provider during a visit to the UK. The place of supply is the UK. This is because the goods are used and enjoyed in the UK and the place of supply would otherwise have been outside the EC. See section 14.
• A UK golf shop hires out a set of golf clubs to a UK customer for use on a holiday in the USA. The place of supply is outside the EC if the customer is able to demonstrate that the golf clubs are used and enjoyed only in the USA. This is because the goods are used and enjoyed outside the EC and the place of supply would otherwise have been the UK. See section 5.
• A company belonging in Switzerland hires fax machines from a supplier in the USA. The fax machines are partly used and enjoyed at the Swiss company’s London branch. The place of supply is the UK to the extent that the machines are used at the London branch. This is because the goods are used and enjoyed in the UK and the place of supply would otherwise have been outside the EC. See section 5.

16.7 What does effective use and enjoyment of telecommunications services and radio and television broadcasting services mean?

Effective use and enjoyment takes place where the customer actually consumes telecommunications services and radio and television broadcasting services (in practice this will be where the services are physically used) irrespective of contract, payment or beneficial interest.

16.7.1 Examples for telecommunications services

• A private individual whose usual place of residence is in the UK rents a telephone line for his holiday home in Florida from a UK supplier. The services are actually used and enjoyed in Florida. The place of supply is outside the EC because effective use and enjoyment takes place outside the EC and the services would otherwise be supplied in the UK. See section 5.
• A UK resident rents a telephone line for his elderly mother’s house in Australia. He receives and pays the bills from his UK provider. The services are actually used and enjoyed in Australia by his mother. The place of supply is outside the EC because effective use and enjoyment takes place outside the EC and the services would otherwise be supplied in the UK. See section 5.
• The parents of a student travelling in the Far East accept a reverse charge call to their UK home from their daughter. The accepted call forms part of the service from their local provider and is actually used and enjoyed at the UK family home. The place of supply is the UK because the services are not effectively used and enjoyed outside the EC. See section 5.
• A business traveller makes a reservation at a Hong Kong hotel from his London office using a toll free number. The telecommunications services are supplied to, and used by, the Hong Kong hotel. The place of supply is outside the EC because the services are not effectively used and enjoyed in the UK. See section 5.

16.7.2 How do the extra rules apply to travellers?

Telecommunications services are subject to UK VAT when used in the UK by non-EC visitors. Examples include public pay-phones, fax shop services and charges for calls made from hotel rooms. However, elements of telecommunications services used in the UK are ignored if they are:

• simply an incidental part of an established telephone contract or account held by a customer who belongs outside the EC
• used by a non-EC temporary visitor, and
• HMRC is satisfied that these conditions are not being abused.

If a UK resident uses telecommunications services outside the EC under such an account with a UK provider, those services will be outside the scope of UK VAT, provided that evidence is retained to substantiate the element of use and enjoyment that occurs outside the EC.

16.8 Do I have to apply different rules if I supply electronically supplied services as well as telecommunications services or radio and television broadcasting services?

HMRC recognises that in certain situations, the place of supply would be the same whether the rules for telecommunications services and radio and television broadcasting services, or those for electronically supplied services were applied. This is because most non-business customers use and enjoy services in the same country in which they belong. See paragraph 17.7.

16.9 Accounting procedures for UK suppliers of letting on hire of goods (other than means of transport), telecommunications services and radio and television broadcasting services

If	you
your customer belongs in the UK,	are not required to account for UK VAT to the extent that your customer uses and enjoys your services outside the EC.
you make B2C supplies and your customer belongs in another Member State,	are not required to account for UK VAT to the extent that your customer uses and enjoys your services outside the EC.
your customer belongs outside the EC,	are required to account for UK VAT to the extent that your customer uses and enjoys your services in the UK.
your customer belongs outside the EC and your customer uses and enjoys your services in another Member State,	may be required to account for VAT in that Member State because those services are supplied in that Member State (see paragraph 16.14).

16.10 Accounting procedures for non-UK suppliers of the letting on hire of goods (including means of transport), telecommunications services and radio and television broadcasting services used and enjoyed in the UK

If you are a supplier who does not belong in the UK and your customer is registered for UK VAT, your customer is responsible for accounting for any VAT due on the supply under the reverse charge procedure. See paragraph 18.11.

If you are a supplier who does not belong in the UK, and your customer is not registered for UK VAT, you, as the supplier, are responsible for accounting for any VAT due on your supply where the place of supply is the UK. See paragraph 18.11.6. If you are not already registered in the UK, you may be liable to register. See paragraph 2.14.

If you are a supplier who does not belong in the EC, you are required to register and account for UK VAT if you supply B2C services that are used and enjoyed in the UK, subject to the normal rules. See Notice 700/1 Should I be registered for VAT?

16.11 Accounting procedures for UK VAT registered recipients of services of the letting on hire of goods (other than means of transport), telecommunications services and radio and television broadcasting services from a non-EC supplier where the place of supply is the UK

If you are a UK VAT registered recipient of these services and:

• you belong outside the EC for the purposes of receiving the supply
• you use and enjoy the services in the UK, and
• your supplier belongs outside the UK

you are required to account for UK VAT using the reverse charge procedure. See paragraph 18.11. See paragraph 18.10 if you belong in the UK for the purposes of receiving such a supply.

16.12 Accounting procedures for UK VAT registered recipients of services of hired means of transport from a non-EC supplier where the place of supply is the UK

If you are a UK VAT registered recipient of these services, you are required to account for the reverse charge where your supplier belongs outside the EC (see paragraphs 18.10 and 18.11).

16.13 How do I account for VAT on the letting on hire of goods, telecommunications services and radio and television broadcasting services that are only partly liable to UK VAT because of the use and enjoyment provisions?

You are only required to account for UK VAT to the extent that the place of supply of services is the UK. Therefore you should seek to identify the location where the services are actually used.

HMRC will normally accept any records or documentation that demonstrates any division in the provision of services but, where such records do not exist, you should make a fair and reasonable assessment.

There is no prescribed method for determining the extent to which services are used in the UK. You may adopt whatever method is available to you that produces a fair and reasonable reflection of services that are liable to UK VAT. If you are in doubt you should contact our Helpline. Evidence of how the apportionment has been made should be retained and made available on request.

16.14 Liability to register in other Member States

If you supply the letting on hire of any goods, telecommunications services or radio and television broadcasting services where the place of supply would be outside the EC under sections 5 or 14, and the services are effectively used and enjoyed by your customer in another Member State, you may be liable to register for VAT in that Member State (see paragraph 2.16).

16.15 Decision tables for hired goods (other than means of transport), telecommunications services and radio and television broadcasting services

Tables in section 22 contain further guidance for all suppliers to help in deciding the place of supply of hired goods (other than means of transport), telecommunications services and radio and television broadcasting services.

17. Use and enjoyment of electronically supplied services

The law on the additional rules for electronically supplied services is in the VAT Act Schedule 4A paragraph 9.

For a definition of electronically supplied services see paragraph 15.12.

17.1 What is the VAT liability of electronically supplied services?

Normally, electronically supplied services supplied in a Member State will be taxable at the standard rate established by a Member State in accordance with Articles 97-98(2) of the Principal VAT Directive (formerly Article 12(3)(a) of the VAT Sixth Directive), unless an exempting provision in a Member State applies.

Particular care should be taken where a service includes both electronic and other elements. Such composite transactions must generally be considered on a case-by-case basis.

17.2 When do the additional rules for electronically supplied services apply?

The additional rules for electronically supplied services apply only where there is a B2B supply in either of the following situations:

• the place of supply would be the UK (because the supplier or the customer belongs in the UK) but the services are effectively used and enjoyed outside the EC, or
• the place of supply would be outside the EC (because the supplier or the customer belongs outside the EC), but the services are effectively used and enjoyed in the UK.

In these circumstances, the place of supply of the electronically supplied services is where their effective use and enjoyment takes place. Where this is the UK, the services are subject to UK VAT.

17.3 How do suppliers of electronically supplied services determine if they make B2B supplies?

In addition to the guidance in paragraph 2.7, section 19 contains additional guidelines which will help suppliers of electronically supplied services determine if they make B2B supplies.

17.4 What do I need to know to decide whether these rules apply?

You need to know:

• where the supplier and customer belong, and
• the place where the services are effectively used and enjoyed.

17.5 Does it always matter where electronically supplied services are effectively used and enjoyed?

It does not always matter where electronically supplied services are effectively used and enjoyed. It only matters in the situations described in paragraph 17.2. The use and enjoyment provisions apply where the EC position would otherwise be distortive. Consequently, they do not apply in any situation where:

• B2C supplies of electronically supplied services are made. This is because most consumers are considered to use and enjoy the services in the same country in which they belong
• the place of supply is the UK (because either the supplier or the customer belongs in the UK) and the service was effectively used and enjoyed in another Member State, or
• the place of supply is in another Member State (because either the supplier or the customer belongs there) but the supply is effectively used and enjoyed in the UK.

In such situations the rules set out in sections 5, 14 and 18 apply.

17.6 What does effective use and enjoyment of electronically supplied services mean?

Effective use and enjoyment takes place where the customer actually consumes the electronically supplied services irrespective of contract, payment or beneficial interest.

17.6.1 Examples for electronically supplied services

• A UK business purchases digitised software from an Irish supplier for use only in its branch in the Channel Islands. Although the supply is received in the UK where the business belongs, it is used outside the EC and is outside the scope of UK (and EC) VAT.
• A USA business purchases web-hosting services for its international business, including its UK branch. Although the supply is received in the USA, to the extent that it is used in the UK, it is subject to UK VAT.
• A UK charity which undertakes both business and non-business activities purchases downloaded information from another UK business for use in both its UK headquarters and its Canadian branch. Although the supply is received in the UK, to the extent it is used in Canada it is outside the scope of UK VAT. UK VAT is only due to the extent of use by the UK headquarters.

17.7 Do I have to apply different rules if I supply telecommunications services or radio and television broadcasting services as well as electronically supplied services?

HMRC recognises that in certain situations, the place of supply would be the same whether the rules for telecommunications services and radio and television broadcasting services, or those for electronically supplied services were applied. This is because most customers receiving B2C supplies use and enjoy services in the same country in which they belong.

Consequently, if you are:

• a UK business which supplies electronically supplied services
• your services are B2C supplies, and
• your existing accounting systems are set up to tax supplies where they are effectively used and enjoyed,

you may, exceptionally, opt to apply the use and enjoyment rules to your supplies of electronically supplied services.

This is a simplification measure which prevents the need for businesses to adjust their systems. However, HMRC will not allow this simplification to be used in any case where we consider it leads to abuse.

17.8 Accounting procedures for UK suppliers of electronically supplied services

If your	you are
B2B supply is to a customer belonging in the UK,	not required to account for UK VAT to the extent that your customer uses and enjoys your services outside the EC.
B2B supply is to a customer belonging outside the EC,	required to account for UK VAT to the extent that your customer uses and enjoys your services in the UK.
B2B supply is to a customer belonging outside the EC and your customer uses and enjoys your services in another Member State.	not required to account for UK VAT as those services are supplied in that Member State. See section 23.

17.9 Accounting procedures for non-UK suppliers of electronically supplied services used and enjoyed in the UK

17.9.1 Non-UK supplier supplying a customer registered for UK VAT

If you are a supplier who does not belong in the UK and you make B2B supplies to a customer belonging in the UK who is registered for UK VAT, your customer is responsible for accounting for any VAT due on the supply under the reverse charge procedure. See paragraph 18.11. If you are registered for VAT in the UK but do not belong in the UK see paragraph 17.10.

17.9.2 Non-UK supplier supplying a customer not registered for UK VAT

If you are a supplier who does not belong in the UK, and you make B2B supplies but your customer is not registered for UK VAT, you, as the supplier, are responsible for accounting for any VAT due on your supply where the place of supply is the UK. See paragraph 18.11.6. If you are not already registered in the UK, you may be liable to register. See paragraph 2.14.

If you are a non-EC supplier of electronically supplied services providing B2C services to in the EC, you may be potentially required to register and account for VAT in every Member State where you supply your services (according to the rules which apply in the various Member States).

However, to relieve this burden, a simplified special scheme permits you to register electronically in the Member State of your choice and account for EC VAT on an electronic VAT return. See section 20. This scheme does not apply to non-EC businesses supplying other services.

17.10 Accounting procedures for UK VAT registered recipients receiving electronically supplied services from a non-EC supplier where the place of supply is the UK

If you are a UK VAT registered recipient receiving a B2B supply and:

• you belong outside the EC for the purposes of receiving the supply
• you use and enjoy the services in the UK, and
• your supplier belongs outside the UK,

you are required to account for VAT using the reverse charge procedure. See paragraph 18.11. If you belong in the UK for the purposes of receiving such a supply see paragraphs 17.9.1 and 18.10.

17.11 How do I account for VAT on electronically supplied services that are only partly liable to UK VAT because of the use and enjoyment provisions?

You are only required to account for UK VAT to the extent that the place of supply of services is the UK. Therefore you should seek to identify the location where the services are actually used.

HMRC will normally accept any records or documentation that demonstrates the extent to which services are used and enjoyed in the UK but, where such records do not exist, you should make a fair and reasonable assessment.

There is no prescribed method for determining the extent to which services are used in the UK. You may adopt whatever method is available to you that produces a fair and reasonable reflection of services that are liable to UK VAT. If you are in doubt you should contact our Helpline. Evidence of how the apportionment has been made should be retained to be made available on request.

17.12 Liability to register in other Member States

If you supply B2B electronically supplied services where the place of supply would be outside the EC under section 5, and the services are effectively used and enjoyed by your customer in another Member State, you may be liable to register for VAT in that Member State. See paragraph 2.16.

17.13 Decision tables for electronically supplied services

Tables in section 23 contain further guidance for all suppliers to help in deciding the place of supply of electronically supplied services.

18. Reverse charge

The law on the reverse charge is in the VAT Act, section 8.

18.1 Who needs to refer to this section?

You will need to refer to this section if you belong, or are VAT registered, in the UK and receive the following types of services from an overseas supplier:

Types of services:	Dealt with in:
B2B general rule services ;	paragraph 18.10;
any other services which are supplied in the UK.	paragraph 18.11.

It is important to refer to the appropriate paragraph because there are different conditions for each situation.

18.2 What is the ‘reverse charge’?

Normally, the supplier of a service is the person who must account, to the tax authorities, for any VAT due on the supply. However, in certain situations, it is the customer who must account for any VAT due. Although called reverse charge in this notice, the procedure may also be referred to as tax shift.

The reverse charge applies to almost all B2B supplies of services except those of a description in Schedule 9 of the VAT Act (Exemptions). It does not apply to land on which the option to tax has been exercised. Reverse charge is not a complicated accounting procedure. Where it applies to services which you receive, you, the customer, must act as if you are both the supplier and the recipient of the services.

18.3 How does the reverse charge work?

You simply credit your VAT account with an amount of output tax, calculated on the full value of the supply you have received, and at the same time debit your VAT account with the input tax to which you are entitled, in accordance with the normal rules. The partial exemption implications for reverse charge services are explained in Notice 706 Partial exemption.

You then include in the relevant boxes of your VAT return:

• the amount of output tax in box 1 VAT due on sales
• the amount of input tax in box 4 VAT reclaimed on purchases
• the full value of the supply in box 6 total value of sales, and
• the full value of the supply in box 7 total value of purchases.

18.4 What is the effect of the reverse charge?

If you can attribute the input tax to taxable supplies, and can therefore reclaim it all, the reverse charge has no net cost to you. If you cannot, the effect is to make you pay VAT on the supply at the UK rate. This puts you in the same position as if you had received the supply from a UK supplier rather than from one outside the UK.

18.5 Valuation of supplies covered by the reverse charge

The amount payable to your overseas supplier for the services excludes UK VAT. The value of the transaction on which VAT must be accounted under the reverse charge is the total amount paid together with the value of any other form of consideration. This includes any taxes levied abroad. See Notice 700 The VAT Guide if you need to convert foreign currency into sterling.

18.6 Time of supply

The time of supply (tax point) for these services depends on whether you make a single supply of services or continuous supplies of services.

18.6.1 What is the time of supply for a single supply of services subject to the reverse charge?

The time of supply (tax point) for a single supply of services subject to the reverse charge is the date of completion of the service or, to the extent a payment for the service is made before completion, the date of payment.

18.6.2 What is the time of supply for continuous supplies of services subject to the reverse charge?

The time of supply (tax point) for continuous supplies of services subject to the reverse charge is the end of each periodic billing or payment period (or payment where this is earlier), with a compulsory tax point on 31 December each year in cases where a billing/payment period or payment has not arisen.

18.7 Can the reverse charge apply to services supplied by UK suppliers?

The reverse charge does not apply to supplies of services where both the supplier and the customer belong in the UK. It only applies where services are supplied in the UK by suppliers belonging overseas.

Services which, under the place of supply rules, are supplied in another country are outside the scope of UK VAT. Such services can only be subject to tax in that country.

18.8 International companies

The reverse charge does not apply to services provided by an overseas establishment to a customer belonging in the UK within the same legal entity as the overseas establishment, since this is not a supply for VAT purposes.

18.9 UK VAT incurred by non-UK suppliers

Suppliers who belong outside the UK, and whose customers account for UK VAT by means of the reverse charge, may be able to reclaim VAT incurred in the UK. See Notice 723 Refunds of VAT in the EC for EC and non-EC businesses.

18.10 B2B general rule services

If you belong in the UK and receive supplies of any B2B general rule services (see section 5) where your supplier belongs outside the UK the reverse charge applies. If you are unsure whether you belong in the UK, see section 3.

18.10.1 Examples

A UK business receives customised software from a USA business (B2B general rule service). The place of supply is the UK and the UK business must account for VAT under the reverse charge.

A UK charity with business and non-business activities receives a supply of legal services from a French business in relation to its non-business activities (B2B general rule service). The place of supply is the UK and the UK charity must account for VAT under the reverse charge.

18.10.2 What if I receive exempt or zero-rated services?

The reverse charge does not apply to exempt services or zero-rated services.

18.10.3 What if I am not already UK VAT registered and receive these services?

If you are not already UK VAT registered and you receive supplies of B2B general rule services which meet the conditions in paragraph 18.10 and are treated as supplied where the recipient belongs, the value of those supplies must be added to the value of your own taxable supplies in determining whether you should be registered for UK VAT. Even if you make no taxable supplies yourself you will still be a taxable person if the value of your imported services exceeds the registration limits.

18.10.4 What if the reverse charge does not apply to these services?

If the conditions in paragraph 18.10 are not met the reverse charge does not apply to these services and there is no UK VAT due on such supplies. However, see paragraph 18.11 if you receive:

• supplies of the letting on hire of goods
• telecommunications services
• radio and television broadcasting services, or
• electronically supplied services,

which are made in the UK under the additional rules for use and enjoyment of such supplies. See sections 16 and 17.

18.10.5 Group treatment

Where B2B general rule services (except services of a description in Schedule 9 of the VAT Act (Exemptions) and land on which the option to tax has been exercised) are purchased by an overseas member of a UK VAT group and provided to a UK member of that VAT group, its representative member is required to account for any UK VAT due under the intra-group reverse charge. See Notice 700/2 Group and divisional registration.

18.11 Extension to other services supplied in the UK

The reverse charge also applies to the following services when they are made in the UK:

• services relating to land and property (see section 6)
• services supplied where performed (see section 8)
• passenger transport (see section 10)
• services covered by the additional rules for hired goods (including hired means of transport), telecommunications services, radio and television broadcasting services (see section 16), and
• services covered by the additional rules for electronically supplied services (see section 17).

18.11.1 When does the extension to the reverse charge apply?

The extension to the reverse charge applies if you are UK VAT registered and receive B2B supplies of the services listed in paragraph 18.11 which are supplied in the UK where your supplier belongs outside the UK.

18.11.2 Should I give my UK VAT registration number?

You should give your UK VAT registration number to your supplier as evidence that they are not liable to account for any UK VAT due.

18.11.3 What if I receive exempt or zero-rated services?

The reverse charge does not apply to exempt or zero-rated services.

18.11.4 What if I receive such supplies for wholly private purposes?

If you receive such supplies for wholly private purposes the reverse charge does not apply. You should not give a UK VAT registration number. Your supplier is liable to account for any UK VAT due.

18.11.5 What if I am not UK VAT registered and receive such services supplied in the UK?

If you are not UK VAT registered and receive such services supplied in the UK the reverse charge does not apply. Such supplies do not count as your taxable supplies for the purposes of determining whether you are liable to be registered as a taxable person. Your supplier is liable to account for any UK VAT due.

18.11.6 What if I am a non-UK supplier of these services but my customer does not give a UK VAT registration number?

If you are a non-UK supplier of these services but your customer does not give a UK VAT registration number you are responsible for accounting for any UK VAT due on your supply. If you are not already registered in the UK, you may be liable to register. See paragraph 2.16.

19. Electronically supplied services: Evidence of customer location and status

For a definition of electronically supplied services see paragraph 15.12.

19.1 When do I need to refer to this section?

You need to refer to this section if you are a supplier of electronically supplied services. This is because you should identify the status and location of your customers in order to determine the place of supply of your services and thus the correct VAT treatment of such services.

19.2 How do I verify my customer's business status?

If you make B2B supplies within the EC the evidence required at the time of the transaction would normally be the customer's VAT registration number and country identification code prefix. The number must conform to the format for the registered person's Member State. See Notice 725 The single market.

Under normal trading practices you will often know your business customers. Therefore, in such cases, you will not need to routinely check all VAT numbers quoted, provided that the numbers conform to the correct country format.

However, where a relationship has not been established with a business customer the VAT number should be checked when:

• the VAT involved exceeds £500 on a single transaction, or
• the cumulative VAT on transactions for electronically supplied services to a single customer in a VAT quarter exceeds £500.

Similarly, if you supply downloaded music, games, films and so on of a kind normally supplied to a private consumer, you would not expect a VAT number to be quoted in such circumstances. However, where a VAT number is quoted in what is clearly a supply to a private consumer the use of that number should be challenged.

Full verification should be undertaken in all cases where you have any reason to believe that a VAT number quoted by a customer is false or is being used incorrectly.

If a customer claims to be in business but not to be VAT registered then alternative evidence should be obtained to support the claim. This can be in the form of other reasonable commercial evidence or records that should normally be available. Examples include contracts, business letterheads, a commercial website address, publicity material, certificates from fiscal authorities. A digital certificate from a reputable organisation can also be used for this purpose.

The VAT Information Exchange System (VIES) can support your decision-making process by providing an online verification system. The system can be accessed using the HMRC website, go to Businesses & Corporations and select the link to the EU VAT registration checker, or go direct to the Europa website.

You may also contact our Helpline to verify names and addresses as well as dates of registration and deregistration where appropriate.

Other Member States may have similar systems by which it is possible to check the validity of VAT registration numbers.

If any of the above checks fail to confirm that your customer is in business or if there remains any doubt about the use of a VAT registration number, VAT should be charged as appropriate on all supplies to that customer including supplies that have already been made.

Any VAT that has been charged in error may be credited under the normal rules.

19.3 How do I identify my customer's country of residence?

Under normal trading practices you will often know your business customers and where they are located. However, this is less likely to be the case with B2C supplies and with lower value transactions to business customers. As technology cannot determine with certainty the place where such customers belong, self-declaration by the customer combined with a reasonable level of verification will be acceptable.

It is likely that you already have established procedures in place to identify and verify the country where your customer belongs. HMRC will rely as much as possible on those practices to ensure you are not burdened with unnecessary requirements. If the method you use is not included in the list of examples in the following paragraph, you are advised to contact HMRC.

Customer self-declaration will be acceptable (without prior approval from HMRC) in respect of electronically supplied services, where one or other of the following practices is followed:

(a) Use of your customer's postal address provided you have used it to send (for example) goods, catalogues, samples, CD-Roms, invoices, correspondence without these items having been returned, undelivered. (However, alternative means will have to be used if mail is returned undelivered.)

(b) Acceptance of payment by credit/debit card where you compare the customer's home address with the billing address, but then rely on satisfactory alternative evidence if the match is unsuccessful.

(c) Acceptance of payment by credit/debit card and, using proprietary software, you compare the customer's country of residence with the location of the issuing bank but then rely on satisfactory alternative evidence if the match is unsuccessful.

(d) Use of geo-location or proprietary software to verify where your customer belongs but then rely on satisfactory alternative evidence if the match fails.

(e) Use of systems that are configured to identify where the service is used and enjoyed (for example telecommunications suppliers). HMRC will accept the arrangement as a proxy for identifying the country where the customer belongs.

If you use one or other of the above methods, you will need to demonstrate that HMRC's requirements have been met. For example, you may be asked to show how your system processes the relevant information.

19.4 What if the information provided by customers is found to be incorrect?

Where verification has been undertaken and the details provided were believed to be correct at that time, but subsequently the customer is found to have made a false declaration, HMRC will not seek to recover VAT from you, the supplier, where it was not charged to the customer. This does not apply if there was reasonable information at the time of the sale to indicate that the customer's information was incorrect. HMRC's treatment of such cases will be subject to periodic review.

20. Electronically supplied services: Special scheme for non-EC businesses

The law on the special scheme for non-EC businesses supplying electronically supplied services is in the VAT Act Schedule 3B.

For a definition of electronically supplied services see paragraph 15.12.

20.1 When do I need to refer to this section?

You need to refer to this section if you are a non-EC business and you make B2C supplies of electronically supplied services to EC consumers. See paragraph 2.5 for an explanation of B2C supplies.

20.2 What is the special scheme for non-EC businesses?

The special scheme provides an optional, simplified means of registering and accounting electronically for EC VAT.

20.3 How does the scheme work?

Electronically supplied services, when supplied by non-EC businesses to EC consumers, are subject to VAT in the Member State where the customer belongs.

This means that non-EC businesses would be required, under the normal rules, to register separately and account for VAT in each and every Member State in which they make those supplies. For example, a Canadian business with customers in the UK, France and Spain would have to register in, and submit declarations to each of those Member States.

As an alternative, the special scheme offers eligible non-EC businesses the option of registering electronically in a single Member State of their choice and accounting for VAT on their sales of electronically supplied services to all EC consumers on a single quarterly electronic VAT declaration which provides details of VAT due in each Member State. This is submitted with payment to the tax administration in the Member State of registration which then distributes the VAT to the Member States where the services are consumed.

20.3.1 Example

A USA business registers for the special scheme in the UK. Its customers are located in the UK, Germany and Italy. The USA business charges UK VAT to its UK customers, German VAT to its German customers and Italian VAT to its Italian customers. The business enters the VAT for each Member State on the appropriate line of the electronic declaration. It sends the declaration electronically with payment to HMRC, who retain the UK VAT and pass on the German VAT to the German authorities and the Italian VAT to the Italian authorities.

20.4 Who may use the special scheme?

You are eligible to use the special scheme if:

• you make B2C supplies of electronically supplied services to consumers belonging in the EC
• you are not established within the EC, and
• you are not registered for VAT under the normal rules in any Member State.

20.5 Can I use the special scheme if I make B2B supplies as well as B2C supplies to consumers in the EC?

You can use the special scheme for your B2C supplies to consumers in the EC even if you also make B2B supplies, subject to meeting the other conditions set out in paragraph 20.4.

You are not entitled to use the special scheme for B2B supplies. You are not required to charge and account for VAT on B2B cross-border supplies of electronically supplied services supplied in the EC because your customers account for any VAT due in their Member State.

20.6 How do I register for the special scheme in the UK?

You can register in the UK for the special scheme from our website, go to About online services and select VAT on eServices (VoES).

From here you can access a secure site which automatically guides you through an electronic registration process. This will include selecting a user name and password to identify yourself for the purposes of completing and submitting declarations electronically (see paragraph 20.18).

Remember: Subject to the conditions in paragraph 20.4, you can elect to register for the special scheme in a Member State of your choice, but you can only register in that one Member State.

20.7 What information must I provide to register?

You will only have to provide the following limited information to register:

• business name
• postal address
• electronic addresses including websites
• national tax number (where applicable)
• a statement that you are not registered for VAT purposes within the EC, and
• the date on which you began, or intend to begin, making supplies of electronically supplied services to EC consumers.

HMRC will also ask you to provide a contact name and telephone number.

20.8 When will I receive a VAT identification number?

We will normally send your VAT identification number by email within five working days of us receiving your completed electronic registration request.

Identification numbers for the special scheme have their own unique format beginning with the prefix 'EU', followed by a nine-digit number. These are different from VAT registration numbers issued under the normal rules.

20.9 Must a business be making supplies before registering?

Subject to the other conditions, you are entitled to register for the special scheme even if you are not actually making supplies of electronically supplied services at the time but intend to do so at a later stage. You will need to complete 'nil' VAT declarations for the period between the date you are registered until the time you begin to make supplies. See paragraph 20.18. However, you must advise HMRC if your intention to make supplies ceases. See paragraphs 20.15 and 20.16.

20.10 What if I am already registered for VAT in the EC under the normal rules but want to apply for the special scheme?

If you are required to be registered for VAT in the EC under the normal rules, for example, because you supply goods or services other than electronically supplied services, you are not eligible for the special scheme. You are required to account for VAT on electronically supplied services to EC consumers under the normal rules.

20.11 Are there any other conditions I must comply with if I apply for the special scheme?

If you apply for the special scheme you are required to comply with all its conditions. These include electronically registering, accounting for, and paying the VAT that is due at the correct time.

There are no penalties which apply under the special scheme. However, if you persistently fail to comply with its conditions, your registration may be cancelled. In that event, you would be required to register under the normal rules which apply in the various Member States where your customers belong. You could then be subject to any penalties which those Member States apply.

Similarly, if you are supplying electronic services to UK customers and you fail to register for VAT (either under the special scheme or under the normal rules), you may be compulsorily registered in the UK under the normal rules and may incur a late registration penalty.

20.12 Can I use an agent to deal with my VAT affairs?

Only a business may register for the special scheme. An agent, even an authorised one, is therefore not allowed to register for the special scheme on your behalf.

You may authorise an agent to submit declarations and, if necessary, payment on your behalf under the special scheme. However, rules regarding agents vary between the Member States.

20.13 My sales of electronic services to EC consumers are small. Do I need to register for the special scheme?

There is no threshold for registration under the special scheme. Although your sales of electronically supplied services to EC consumers may be small or even occasional, the special scheme enables you to register, submit declarations and pay VAT in the single EC Member State of your choice. If you choose not to register under the special scheme, the normal rules (including VAT registration thresholds) will apply. In contrast to the special scheme, these may require you to register and account for VAT in most Member States where your customers belong.

20.14 Am I required to register if my services qualify for a VAT exemption in the EC?

Normally, electronically supplied services supplied in a Member State will be taxable at the standard rate established by a Member State, unless an exempting provision in a Member State applies. If you think that your services may qualify for an exemption you should check with the Member State(s) concerned.

However, if any of your services are taxable in your customer’s Member State, you may be required to register and account for VAT in the EC under either the normal rules or the special scheme.

20.15 What is the procedure if my business's

circumstances change?

Once you are registered for the special scheme, you must notify us, using the dedicated website, if:

• there is any change in your business details as at paragraph 20.7 above
• you cease to make, or cease to have the intention of making, electronically supplied services to EC consumers, or
• you cease to be eligible for the scheme (for example, you begin to supply goods in the EC and are consequently liable to register under the normal rules).

You must advise us within 30 days of the date of the changes, or of the date when your intention to make supplies ceased.

20.16 In what circumstances must I apply to cancel my registration under the special scheme?

You must apply to cancel your registration under the special scheme if at any time you cease to be eligible for it; for example, if you cease to supply electronically supplied services to EC consumers or if you establish your business within the EC.

We can also cancel your registration in certain circumstances if you do not meet the conditions of the special scheme, for example, because we discover you make supplies other than electronically supplied services in the EC and are therefore required to register under the normal rules.

20.17 What if I decide to switch from registration under the normal rules to the special scheme at a later date?

If you are required to be registered in the EC solely because you are supplying electronically supplied services to EC consumers, you may decide to register under the normal rules. For example, you might initially be making supplies of electronically supplied services to consumers in a single Member State only. You may subsequently wish to register under the special scheme, for example, because you expand your market to consumers in other Member States.

In these circumstances, you may apply to be registered for the special scheme in the UK provided you cancel your registration under the normal rules with the Member State concerned.

20.18 What is the procedure for submitting declarations and payments?

Electronic declarations are due for each calendar quarter (30 September, 31 December, 31 March and 30 June) and should be submitted within 20 days after the end of the quarter to which it relates. For example, a declaration for the quarter ending 30 September should be submitted with full payment of the tax due, by 20 October. You must also submit 'nil' declarations.

You complete the declaration by logging on to the dedicated website using your VAT identification number, user name and password to ensure security.

20.19 What details will be required on the VAT declaration?

For each Member State in which your business has supplied electronically supplied services you must state on the declaration:

• the total value of all supplies in the period excluding any VAT
• the VAT rate which applies, and
• the total amount of VAT payable.

You must also show the total amount of VAT payable in all Member States.

20.20 Can I recover VAT on purchases under the special scheme?

You cannot recover VAT on purchases using the special scheme. The special scheme provides only for payment of the VAT due on sales to your EC customers without any deductions of EC VAT incurred on purchases. However, you may reclaim any VAT that you have paid on goods and services used for the purpose of your taxable activities falling under the special scheme from the Member State where that VAT was paid, under the terms of the EC 13th Directive. See paragraphs 18.9 and 20.34.

20.21 How do I pay electronically?

You will need to arrange with your bank to make electronic payment to HMRC’s bank account at the same time you submit the declaration. The bank account details can be found on the dedicated website. You should not use any other bank account.

20.22 In what currency must returns and payments be made?

Businesses registered for the special scheme in the UK are required to submit declarations and payments in sterling.

20.23 What exchange rate must I use when converting into sterling?

Businesses registered for the special scheme in the UK are required to submit declarations and payments to HMRC in sterling (GBP). Conversions from other currencies into sterling must be made using the exchange rates published by the European Central Bank (the ECB):

• for the last day of the reporting period to which the declaration relates, or
• if no such rate is published for that day, for the next day for which such a rate is published.

To avoid the need for businesses to calculate a conversion from the currency of sale into Euros and then from Euros into sterling, HMRC publishes online the exchange rates for some leading currencies direct into sterling. This includes dollars (USA, Canadian and Australian), rupees and yen.

Alternatively, you may calculate the conversion yourself using the exchange rates shown at the ECB’s website.

20.24 What VAT rates apply in the Member States?

Non-EC businesses supplying electronic services to EC consumers are required to charge VAT at the rate which applies in the customer’s Member State. These rates are published on the Commission’s website.

20.25 How will I know that HMRC has received the declaration?

You will receive an online acknowledgment confirming that HMRC has received your declaration. If you do not immediately receive this, you should contact our Customer Services Team by email at voes@hmrc.gsi.gov.uk

This acknowledgment also provides a unique reference number for each declaration you submit. You should refer to this number if you need to contact us with a query about a declaration.

20.26 What do I do if a business customer requests a refund of VAT?

The special scheme is intended for supplies to consumers who cannot recover VAT. Thus, a business customer who fails to provide a valid VAT registration number at the time of the transaction and is charged VAT, cannot deduct that VAT as input tax. However, if he subsequently produces a valid VAT registration number and requests a credit, you may refund the VAT.

20.27 What is the procedure for correcting an error in the VAT declared on the declaration?

If you submit a declaration and subsequently discover that you have made an error, for example, entering French VAT in the line for Spain or underdeclaring UK VAT, you should contact us at VOES quoting your declaration acknowledgement number (see paragraph 20.25) and advising of the correct amount(s) due for the Member State(s) concerned. You do not need to submit a supplementary declaration.

If you owe additional VAT as a result of your mistake, you will either be asked to send the payment to HMRC or advised that the Member State(s) concerned will contact you to explain how you should pay the VAT due.

20.28 What do I do if I have paid an amount different to the VAT declared?

If you have declared the correct amount of tax, but discover that you have paid HMRC more or less than that amount in error, you should contact us at VOES to obtain advice on what action to take.

20.29 What records should I maintain?

If you are registered for the special scheme you should maintain records of your transactions in sufficient detail to enable the tax administrations in your customers' Member States to determine that the VAT declarations and payments you make are correct. These records include normal commercial data held for each transaction, for example, transaction number, date, type (credit or debit), customer name and location, currency and values including VAT.

These records should be made available electronically on request to either the tax administration where:

• you are registered for the special scheme, or
• where your customers belong.

20.30 How long must business records be retained?

Businesses must retain records relating to supplies made under the special scheme for a period of ten years.

20.31 Must I issue VAT invoices?

It is common practice for businesses supplying electronically supplied services to issue electronically an invoice or similar document which confirms the details of the sale. There are no special rules for issuing VAT invoices under the special scheme and consequently the normal rules apply. In the UK you are not required to issue VAT invoices for such supplies because your customers are not in business for the purposes of the special scheme and cannot deduct VAT on their purchases.

20.32 Can I appeal any aspects of the special scheme to a VAT Tribunal?

Under paragraph 20(1) of Schedule 3B to the VAT Act, you have the right to appeal to a VAT Tribunal about any decisions HMRC gives on the following aspects of the special scheme:

• registering or cancelling the registration of any person
• a decision to give a formal notice of an amount underdeclared, or
• the amount of VAT stated as over or underdeclared in a formal notice.

20.33 What if I have a dispute with another Member State?

UK VAT Tribunals cannot deal with VAT matters which fall within the jurisdiction of other Member States. If you disagree with a decision taken by a Member State about any aspect of the special scheme, for example the amount of VAT owed to you, you should raise the matter with them.

20.34 How do I make a claim under the 13th Directive for a refund of VAT paid in the UK?

Claims under the 13th Directive for a refund of VAT paid in the UK can be made on form VAT 65A. Claimants registered under the special scheme should state in section 8A of the VAT 65A ‘ESS special scheme’ and quote their special scheme identification number, and also indicate in section 9 of the form which expenditure relates to the special scheme.

Full details of the general requirements are in Notice 723 Refunds of VAT in the EC for EC and non-EC businesses.

20.35 How do I recover VAT paid in other Member States of the EC?

You must contact the responsible authorities in the other Member States for information on how to reclaim VAT incurred in those countries. Details of the authorities are given in Notice 723 Refunds of VAT in the EC for EC and non-EC businesses.

21. Territory of the European Community (the EC)

(referred to in paragraph 2.11)

From 1 January 2007, the VAT territory of the EC is made up of 27 Member States. The following table shows the Member States and their territories which are included or excluded for VAT purposes.

Member State	Including	but excluding
Austria	Jungholz and Mittelberg
Belgium
Bulgaria
Cyprus	the British Sovereign Base Areas of Akrotiri and Dhekelia,	the United Nations buffer zone and the part of Cyprus to the north of the buffer zone, where the Republic of Cyprus does not exercise effective control.
Czech Republic
Denmark		the Faroe Islands and Greenland.
Estonia
Finland		Ǻland Islands.
France	Monaco,	Martinique, French Guiana, Guadeloupe, Reunion and St Pierre and Miquelon.
Germany		the Island of Heligoland, and Büsingen.
Greece		Mount Athos (also known as Agion Oros).
Hungary
Ireland
Italy		Campione d’Italia, the Italian waters of Lake Lugano and Lvigno.
Latvia
Lithuania
Luxembourg
Malta
Netherlands		Antilles.
Poland
Portugal	the Azores and Madeira.
Romania
Slovakia
Slovenia
Spain	the Balearic Islands,	the Canary Islands, Ceuta and Melilla.
Sweden
United Kingdom	the Isle of Man,	the Channel Islands and Gibraltar.

21.1 Other areas not within the EC

Liechtenstein, the Vatican City, Andorra and San Marino are not within the EC for VAT purposes.

22. Decision tables for telecommunications services, hired goods (other than means of transport), radio and television broadcasting services

(referred to in paragraphs 5.5, 15.9.4, 15.10.5, 15.11.4 and section 16).

22.1 What does this section cover?

This section provides more specific guidance through examples with explanations of place of supply, use and enjoyment implications and the UK VAT position.

It is important that you read each row in a table in its entirety.

Table	Description
Table 1	Paragraph 22.2 – gives examples where the supplier belongs in the UK.
Table 2	Paragraph 22.3 – gives examples where the supplier belongs in another Member State.
Table 3	Paragraph 22.4 – gives examples where the supplier belongs outside the EC.

22.2 Table 1: Examples where the supplier belongs in the UK

Customer belongs (see section 3)	UK VAT position is that**	Additional rules: use and enjoyment provisions (see section 16)
in the UK.	services are supplied in the UK and the supplier accounts for any UK VAT due.	Services used and enjoyed outside the EC are outside the scope of UK (and EC) VAT.
in another Member State and receives a B2B supply of services.	services are supplied in the other Member State and are outside the scope of UK VAT.	Do not apply.
in another Member State and receives a B2C supply of services.	services are supplied in the UK and the supplier accounts for any UK VAT due.	Services used and enjoyed outside the EC are outside the scope of UK (and EC) VAT.
outside the EC.	services are supplied outside the EC and are outside the scope of UK (and EC) VAT.	Services used and enjoyed in the UK are supplied in the UK and the supplier accounts for any UK VAT due.

**This is the correct VAT treatment unless the additional rules shown in the last column apply.

22.3 Table 2: Examples where the supplier belongs in another Member State

Customer belongs (see section 3)	UK VAT position is that**	Additional rules: use and enjoyment provisions (see section 16)
in the UK and receives a B2B supply of services.	services are supplied in the UK and the customer accounts for UK VAT by applying the reverse charge (see section 18).	Services used and enjoyed outside the EC are outside the scope of UK (and EC) VAT.
in the UK and receives a B2C supply of services.	services are supplied in the supplier’s Member State and are outside the scope of UK VAT (invoices will show local VAT).	Do not apply.
in another Member State.	services are supplied in another Member State and are outside the scope of UK VAT.	Do not apply.
outside the EC.	services are supplied outside the EC and are outside the scope of UK (and EC) VAT.	Services used and enjoyed in the UK are supplied in the UK and the supplier accounts for any UK VAT due, unless the customer provides a UK registration number and accounts for UK VAT by applying the reverse charge (see section 18).

**This is the correct VAT treatment unless the additional rules shown in the last column apply.

22.4 Table 3: Examples where the supplier belongs outside the EC

Customer belongs (see section 3)	UK VAT position is that**	Additional rules: use and enjoyment provisions (see section 16)
in the UK and receives a B2B supply of services.	services are supplied in the UK and the customer accounts for any UK VAT by applying the reverse charge (see section 18).	Services used and enjoyed outside the EC are outside the scope of UK (and EC) VAT.
in the UK and receives a B2C supply of services.	services are supplied in the supplier’s country and are outside the scope of UK (and EC) VAT - use and enjoyment provisions are likely to apply.	Services used and enjoyed in the UK are supplied in the UK and the supplier accounts for any UK VAT due.
in another Member State and receives a B2B supply of services.	services are supplied in the other Member State and are outside the scope of UK VAT.	Do not apply.
in another Member State and receives a B2C supply of services.	services are supplied in the supplier’s county and are outside the scope of UK (and EC) VAT.	Services used and enjoyed in the UK are supplied in the UK and the supplier accounts for any UK VAT due.
outside the EC.	services are supplied outside the EC and are outside the scope of UK (and EC) VAT.	Services used and enjoyed in the UK are supplied in the UK and the supplier accounts for any UK VAT due, unless the customer provides a UK registration number and accounts for UK VAT by applying the reverse charge (see section 18).

**This is the correct VAT treatment unless the additional rules shown in the last column apply.

23. Decision tables for electronically supplied services

(referred to in paragraph 5.5, and section 17)

23.1 What does this section cover?

This section provides more specific guidance through examples with explanations of place of supply, use and enjoyment implications and the UK VAT position.

It is important that you read each row in a table in its entirety.

Table	Description
Table 1	Paragraph 23.2 – gives examples where the supplier belongs in the UK.
Table 2	Paragraph 23.3 – gives examples where the supplier belongs in another Member State.
Table 3	Paragraph 23.4 – gives examples where the supplier belongs outside the EC.

23.2 Table 1: Examples where the supplier belongs in the UK

Customer belongs (see section 3)	UK VAT position is that**	Additional rules: use and enjoyment provisions (see section 17)
in the UK and receives a B2B supply of services.	services are supplied in the UK and the supplier accounts for any VAT due.	Services used and enjoyed outside the EC are outside the scope of UK (and EC) VAT
in the UK and receives a B2C supply of services.	services are supplied in the UK and the supplier accounts for any VAT due.	Do not apply.
in another Member State and receives a B2B supply of services.	services are outside the scope of UK VAT and the customer accounts for any VAT due.	Do not apply.
in another Member State and receives a B2C supply of services.	services are supplied in the UK and the supplier accounts for any VAT due.	Do not apply.
outside the EC and receives a B2B supply of services.	if the services are not used and enjoyed in the EC the services are outside the scope of UK and EC VAT.	Services used and enjoyed in the UK are supplied in the UK and the supplier accounts for any VAT due. Services used and enjoyed in another Member State are outside the scope of UK VAT but may be within the scope of VAT in the Member State where they are used and enjoyed. Check with Member State.
outside the EC and receives a B2C supply of services.	services are supplied outside the EC and outside the scope of UK (and EC) VAT	Do not apply.

**This is the correct VAT treatment unless the additional rules shown in the last column apply.

23.3 Table 2: Examples where the supplier belongs in the EC

Customer belongs (see section 3)	UK VAT position is that**	Additional rules: use and enjoyment provisions (see section 17)
in the UK and receives a B2B supply of services.	services are supplied in the UK. Customer accounts for any UK VAT by applying the reverse charge (see section 18).	Services used and enjoyed outside the EC are outside the scope of UK VAT.
in the UK and receives a B2C supply of services.	services are supplied in the supplier’s Member State and the supplier accounts for any VAT due.	Do not apply.
in another Member State.	services are outside the scope of UK VAT.	Do not apply.
outside the EC and receives a B2B supply of services.	if the services are not used and enjoyed in the EC the services are outside the scope of UK and EC VAT.	Services used and enjoyed in the UK are supplied in the UK. Supplier accounts for any VAT due unless the customer provides a UK VAT registration number and accounts for UK VAT using the reverse charge. Services used and enjoyed in another Member State are outside the scope of UK VAT but may be within the scope of VAT in the Member State where they are used and enjoyed. Check with Member State.
outside the EC and receives a B2C supply of services.	services are supplied outside the EC and outside the scope of UK (and EC) VAT.	Do not apply.

**This is the correct VAT treatment unless the additional rules shown in the last column apply.

23.4 Table 3: Examples where the supplier belongs outside the EC

Customer belongs (see section 3)	UK VAT position is that**	Additional rules: use and enjoyment provisions (see section 17)
in the UK and receives a B2B supply of services.	services are supplied in the UK. Customer accounts for any UK VAT by applying the reverse charge (see section 18).	Services used and enjoyed outside the EC are outside the scope of UK VAT.
in the UK and receives a B2C supply of services.	services are supplied in the UK. Supplier should account for any UK VAT due. (Supplier may opt to use the special scheme, subject to conditions.)	Do not apply.
in another Member State.	services to customer in another Member State are outside the scope of UK VAT.	Do not apply.
outside the EC and receives a B2B supply of services.	services are supplied outside the EC and are outside the scope of UK (and EC) VAT.	Services used and enjoyed in the UK are supplied in the UK. Supplier accounts for any UK VAT due unless the customer provides a UK VAT registration number and accounts for UK VAT using the reverse charge (see section 18). Services used and enjoyed in another Member State are outside the scope of VAT but may be within the scope of VAT in the Member State where they are used and enjoyed. Check with Member State.
outside the EC and receives a B2C supply of services.	services are supplied outside the EC and are outside the scope of UK (and EC) VAT.	Do not apply.

**This is the correct VAT treatment unless the additional rules shown in the last column apply.

24. Index

This index is a guide to the information set out in Notice 741. The references are to relevant sections (sec) or paragraphs (for example 2.1).

There is a more general index at the back of Notice 700 The VAT Guide, which covers a wide range of VAT issues.

Subject	Sub-heading within subject	Paragraph/section reference
Accountants		15.5.6
Advertising services		15.4
Advisory services		15.5.2
Agency		3.4
Agents – see intermediaries
Alteration services – land		6.4
Analysis of test results		15.5.2
Ancillary services	- freight transport - where performed	sec 11 8.1.1, 8.4
Architects		6.4, 15.5.8
Artistic services		8.1.1, 15.5.8
Auctioneers services		6.4
Banking		15.6.2
Barristers		15.5.6
Belonging		sec 3
Branch		3.4
Business establishment – definition of		3.3
Charters		11.2
Clerical services		15.5.3
Commodity brokers’ services		15.6.2
Communications – see telecommunications
Computer software		15.2.2, 15.5.2, 15.12.3
Conferences		8.1.2
Construction services		6.4
Consultants		15.5.2
Conversion services – land		6.4
Copyright		15.2
Cultural services		8.1.1
Data processing		15.5.10
Debt collection		15.6.2
Demolition services		6.4
Design services		15.5.8
Downloaded publications - VAT treatment		15.12.4
EC – see European Community
Education services		8.1.1
Email		15.10.2
Electricity distribution systems - see Gas and electricity distribution systems
Electronically supplied services	- general	15.12
	- use and enjoyment provisions	sec 17
	- evidence of customer location and status	sec 19
	- special scheme for non-EC businesses (VoES)	sec 20
	- decision tables	sec 23
Engineers’ services	- where performed	8.4.1
	- where customer belongs	15.5.4
Enlargement services – land		6.4
Entertainment services	- where performed	8.1.1, 8.1.2
Estate agents		6.4
European Community	- territory of	sec 21
Exhibitions	- exhibition services	8.1.1
	- defined stand sites	6.4
	- undefined stand sites	8.1.2
	- organising	8.3
Feasibility studies		6.5.1
Film directors/producers		15.5.8
Financial services		15.6
Fixed establishment - definition of		3.4
Flying training		8.1.2
Freight containers		15.9.2, 15.9.5
Freight transport	- B2C	sec 11
General rule		sec 5
Gas and electricity distributions systems	- access to and transport or transmission through	15.7
Gold		15.6.2
Goods - definition of		8.5.1
	- work on/valuation of	8.5
	- zero-rating of work on goods for export from EC	8.6
Goods on hire	- means of transport	sec 7, sec 16
	- other	15.9, sec 16, sec 22
Hotel accommodation		6.4
Information	- provision of	15.5.12
	- transmission of	15.10.2
Insurance		15.6
Input tax		2.12
Intermediaries	-B2B general rule	sec 5
	- B2C	sec 12
International services	-general	sec 4
	- work on goods for export from EC	8.6
	- intermediaries	13
Internet services		15.10.4
Interpreter’s services	- at an event	8.1.2
Isle of Man		2.11
Land		sec 6
Lawyers – see also solicitors		15.5.6
Letting on hire of a means of transport – see goods on hire – means of transport
Letting on hire of goods – see goods on hire – other
Licences		15.2
Loans		15.6.2
Loss adjusters		6.4, 15.5.8
Machinery		6.4, 6.5.1
Maintenance services		6.4, 6.5.1
Management services		15.5.6
Market research		15.5.2
Means of transport – definition of		7.1
Meetings		8.1.2
Member States – see European Community
Mortgages		15.6.2
Outside the scope – definition of		2.1
Passenger transport		sec 10
Patents	- general	15.2.1
Place of belonging – see belonging
Place of supply of services		sec 2
Plant		6.4, 6.5.1
Portfolio management		15.6.2
Promotions and publicity		15.4
Property management		6.4
Radio and television broadcasting services	- general	15.11
	- use and enjoyment provisions	sec 16
	- decision tables	sec 22
Reconstruction services – land		6.4
Recording studio		6.5.1
Reinsurance		15.6
Relinquishing rights		15.3
Rent collection		6.4
Repair – land - see also work on goods		6.4, 6.5.1
Research and development		15.5.2
Residence – see usual place of residence
Restaurant and catering services	- general	9.1
	- EC on-board	9.2
Reverse charge		sec 18
Sailing training		8.1.2
Scientific reports		15.5.2
Scientific services		8.1.1, 8.1.2
Secretarial services		15.5.3
Securities		3.8. 15.6.2, 15.6.4
Solicitors – see also lawyers		6.4, 15.5.6
Sporting services		8.1.1, 8.1.2
Sports transfer fees		15.8.2
Staff		15.8
Surveyors		6.4, 15.5.8
Surveys of land		6.4
Telecommunications	- general	15.10
	- use and enjoyment provisions	sec 16
	- decision tables	sec 22
Territory of EC – see European Community
Testing of goods		15.5.2
Tour operators		2.10
Trademarks		15.3.2
Training services	- general	8.1.2
	- for overseas Governments	8.2
Translation services		15.5.2
Transmission services		15.10.1
Transport – see freight transport & passenger transport
Trustee services		15.6.2
Television broadcasting services – see radio and television broadcasting services
UK – definition of		2.11
Unallocated precious metal/metal coins		15.6.2
Use and enjoyment provisions	- letting on hire of goods, telecommunications services, radio and television broadcasting services	sec 16, 22
	- electronically supplied services	sec 17, 23
Usual place of residence – definition of		3.5
Valuation services	- general	8.1.1, 8.5
VoES (VAT on e-Services) – special scheme for non-EC businesses		sec 20
Warehouse space		6.4
Work on goods		8.1.1, 8.5, 8.6
Zero-rating - definition of		sec 4

Do you have any comments or suggestions?

We would be pleased to receive any comments or suggestions you may have about this notice. Please write to:

HM Revenue & Customs
Place and Time of Supply Team
100 Parliament Street
London
SW1A 2BQ

Please note this address is not for general enquiries.

For your general enquiries please phone the Helpline 0845 010 9000.

Putting things right

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For more information about our complaints procedures go to www.hmrc.gov.uk and under ‘quick links’ select ‘Complaints’

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