VAT alert – Place of supply of services

Callum McCormack
VAT, News

Until 31 December 2020, businesses making supplies of certain services (such as legal, financial or accountancy services) to non-business customers based outside of the EU were not required to charge VAT, as these services were deemed to be outside the scope of UK VAT.

From 1 January 2021, EU countries are now included in this treatment. Therefore, VAT should not be charged on B2C supplies of these services to EU based customers.

This change has impacted all businesses who make B2C supplies of these certain services to individuals based in the EU, a list of these services can be found here. To confirm, these changes do not apply where the services relate to land or property in the UK. These supplies remain within the scope of UK VAT.

You should consider reviewing invoices issued to non-business clients to confirm correct treatment, to date and going forward. There may be a need to issue VAT-only credit notes where clients have been charged VAT in error.

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