VAT on services sold to business customers outside UK

Hi, We are a tour operator selling wholesale B2B package tours to customers based outside UK (EU and outside EU). These packages include bought in services such as hotel rooms, restaurants, flights, transfers by coach or taxi, train tickets, entries to museums, entries to distilleries, hire of golf clubs etc. My question is, when do we charge 0% VAT to customers and when do we charge 20%? According to Place of supply of services (VAT Notice 741A) point 9.2 B2B supplies of admission to an event: The only B2B service taxable where performed is the admission to an event. All other B2B services are determined under the general B2B rule. Does that mean that admission tickets to museums should be invoiced at 20%, with the rest being 0%? Is this the only exception or are there any other services that should be charged at 20% ? I would really appreciate your help on this. Thank you, Daiva

Hi,

If you are making wholesale supplies then these supplies would not fall under the Tour Operators Margin Scheme and the liability of these supplies would be determined by the place of supply of these services.

Please can you confirm if the services being provided, for example, hotel rooms, are being provided in the UK to overseas companies or are the hotel rooms/transport services outside the UK?

Thank you.
 

Hi, if a tour operator selling wholesale B2B package tours to customers based outside UK (EU and outside EU). These packages include bought in services such as hotel rooms, restaurants, flights, transfers by coach or taxi, train tickets, entries to museums etc. All these services provide in the UK. My question is, how do we need charge VAT in this situation?

Hi Account.Account Accountant,
Please see the guidance below which gives you the option to use TOMS if you are providing wholesale supplies:
Tour Operators' Margin Scheme (VAT Notice 709/5)

Dear Admin Thank you for providing the link. So, did we understand correctly that a UK-based company selling wholesale B2B package tours to customers based outside the UK (EU and outside EU) but all services provided in the UK need to charge 20% VAT or choose TOMS? And is a general rule service supplied where the customer belongs not applicable in this situation? Thank you in advance for your reply.

Hi,

The guidance states that if you make wholesale supplies then you have a choice between treating then within the TOMS scheme or outide the TOMS scheme. 

If you treat them outide the TOMS scheme then this does not necessarily meam that you have to charge 20% on all supplies as it depends on the type of service supplied and hence the place of supply of that service. You can see the guidance here:

Place of supply of services (VAT Notice 741A)

If a service you provide comes under the general rule then the supply will be outside the scope of UK VAT if the business is overseas.

Thank you.

Dear Admin Thank you for providing the link. If we make wholesale supplies and choose VAT outside the TOMS scheme, we must use VAT Notice 741A. We checked our type of service and place of supply. We provide packages that include services such as hotel rooms, restaurants, transfers by coach or taxi, train tickets, and museum admission. Could you please confirm that we need to use 6.4 special rules for such services: - hotel (land related) - section 7 - hire of means of transport - section 8 - services, including admission (different entertainment services, exhibitions, museums, etc) - section 9 - restaurant and catering services - section 9 Please confirm regarding the information above as all our services (hotels, transport, museums, entertainment, restaurant and catering, etc) are provided on the territory of the UK, and we need to charge 20% VAT. Thank you in advance for your help.

Hi. Yes all the services you have mentioned as per 6.4 would have a Place of Supply where these supplies take place and so would attract VAT at 20%. Thank you .

 

Hello, could you please kindly advise on the following VAT scenario. I am UK a self-employed individual, not registered for VAT. I am organising an event for a Portuguese company, the event will be in Portugal too. I am booking a UK artist, but acting as an intermediary. Should this UK company be charging me VAT if 1. I am not registered for VAT 2. the service is outside the UK, but the contract will be with me, based in the UK

Hi Vit,
If the UK artist is charging you as the agent for a performance in the EU then the Place of Supply would normally be the UK as the supply would come under the General Rule Of Services.
As both you and the artist are in the UK then UK VAT would apply.
Please see the guidance below:
6. The place of supply rules for services
9. Services supplied ‘where performed’
Thank you.

We are a Vat registered UK company, our private client (individual, not a company) is based in Khazakstan, we are providing a service to them in Kazakhstan. Do we have to charge UK VAT?

Hi MayaGoodstart,
It would depend on the service that your are providing please refer to this guidance:
Place of supply of services (VAT Notice 741A)
Thank you.