The law defines a supply of services as “anything done for a consideration other than a supply of goods”. In other words, it’s about as broad as it could be.
In real life, of course, the distinction between goods and services isn’t always clear-cut. The real-life example of the construction of a data warehouse may be helpful here.
Some of the work being done amounted to the “installation or assembly of goods”, and was therefore a supply of goods. Other work being done was regarded as “construction”, and was therefore covered by the services rules. And some of the work seemed to be a bit of both!
We were able to assist the client in ensuring that they got all the VAT back they were entitled to, and that they – and their customer – didn’t end up paying any more VAT than they should have done.
Close attention to the rules combined with patient application to HMRC’s bureaucracy led to a good and clear outcome for the client. They knew what they had to do and they were able to do it, without losing out from a commercial perspective.
The services rules, like the rules for goods, are easy if you’re not doing anything unusual. If you, as a business, buy – say – accountancy services from the Republic of Ireland – then they will be zero-rated under the reverse charge.
However, if you are involved in property or construction, then the outcome can be quite different, and you may require registration in another jurisdiction.
If you are getting involved in buying or selling services across borders, give us a call to see how we can help you navigate the various rules and procedures, to get a good outcome for you.
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