UK companies that do not 'belong' in the UK

My client is going to supply web design services to UK businesses through a UK VAT registered and incorporated company using our accountancy office address as its registered office. We will do its accounts and tax returns but otherwise nothing will be done for the business in the UK. My client will run the business entirely from his home in Spain where he lives. Should I charge my client UK VAT on my accountancy invoices?

The place of supply of B2B tax and accountancy type services is where your business client belongs. On the face of it, this is the UK as your client will be a UK incorporated entity. However, if that incorporated entity has only a ‘brass plate’ establishment in the UK, it will not belong in the UK for VAT place of supply purposes. A ‘brass plate’ establishment essentially means where there is no human or technical resources permanently present in the UK that are capable of making or receiving supplies in the UK on the company's behalf (see definition of a non-established taxable person in HMRC's manual at VATREG37150). It appears instead that its business establishment is actually in Spain where the company is operated from on a day-to-day basis. Your services would therefore have a Spanish place of supply and be reverse-chargeable in Spain; this may create a Spanish VAT registration liability for the company.

In addition, as the company is not established in the UK, any supply of web design services it makes to UK business customers will be subject to the reverse charge by the UK customers irrespective of the company’s UK VAT registration status.

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