VAT Case Study
VAT Case Study 1:
Does a US online trading business, with no fixed establishment in the UK or Europe, have an obligation to charge and account for VAT across the UK and Europe?
We were approached by a US established business (Online Training Inc) which supplies online training to customers. The training is not educational, more vocational/professional training.
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With no fixed establishment in the UK or Europe, Online Training Inc believed that it has no obligation to charge and account for VAT across the UK and Europe.
The company engaged us to determine if this is correct.
An important point to note here is that we often find that businesses do not often consider VAT as part of their planning process; often it is an after thought, once a VAT liability is recognised, and then, in many cases, it is too late!
In this instance, due to the nature of the services supplied, it was determined that there would be a liability to register for VAT both in the UK and in Europe (the non-union One Stop Shop).
Depending upon the nature of the training delivered, the outcome could have been different so each set of facts needs to be assessed individually to ensure the correct VAT treatment is applied.
The benefit to the client of consulting us at RPGCC to look at the project before Online Training Inc took the next step were:
• Penalties and interest were avoided in the UK and Europe
• VAT registrations were put in place before supplies commenced
• VAT rates for all jurisdictions were taken into account and prices adjusted accordingly so that revenue profit was not impacted
• Online Training Inc delivered/delivers a seamless service to its customers
How did we help?
In the case of this VAT Case Study we were able to:
• Analyse the nature of the supplies provided by Online Training Inc
• Determine the correct place of supply for VAT purposes
• Register for VAT accordingly in the UK and Europe (the non-union One Stop Shop)
• Provide ongoing compliance (VAT filings) in the UK and Europe.
If you are planning on expanding your overseas business into the UK there are a number of questions you should consider:
Have you considered the VAT implications of your next project?
How sure are you that you have VAT covered?
Should you be charging VAT?
Should you be paying VAT?
Can you recover VAT? At 20% (in the UK), getting this wrong can significantly impact your bottom line.
If you would like to speak to a member of RPGCC’s VAT team about any area covered in this VAT Case Study, or indeed any area of VAT, please contact them today. They are happy to meet with you on a no obligation basis for an initial discussion and break down complex VAT issues into something manageable for you and your business.
Arranging a free meeting with our VAT team is easy contact us or telephone us on 020 7870 9050. Or you can visit our web chat in the bottom right corner which is manned during office ours and you can leave a message out of hours.
The RPGCC team are always just a click or call away. Could you be our next VAT Case Study?