05 Jul 2016
Q. My client is a solicitor and provides legal services to asylum seekers and immigrants in the UK. An employee from the Immigration Office has advised my client that he should not be charging VAT on these services. Please can you confirm if this is correct? A. For VAT purposes, persons who have not been granted a right or permission to remain in the UK should be treated as belonging in their country of origin. This applies to asylum seekers and those entering into the UK without permission. ‘Belonging’ in this context involves something more than mere presence. In these circumstances, the country in which individuals have their usual or permanent place of residence can only reasonably be seen to be their country of origin unless and until they are granted the right to remain in the UK. This treatment applies to all supplies of legal services in relation to an application to remain in the UK (including services relating to that application, or costs, after a judgement has been made) even if a final bill is rendered after the recipient has been granted the right to remain in the UK. However, once an individual is granted leave or permission to remain in the UK, then the place of supply of any legal services supplies to him thereafter (for example, in relation to his obtaining a work permit) will be the UK. In addition, where an individual is granted the right or permission to remain in the UK and this expires or is subsequently revoked for whatever reasons, they should be treated, for VAT purposes, as resident in the UK until such time as the issue is concluded (including any time taken to go through any appeal process). VAT should be charged on all relevant services supplied to such a person, subject to the normal rules. In exceptional circumstances, an individual may not have an identifiable country of origin. Such individuals are in effect stateless and should be treated, for VAT purposes, as belonging in the UK. For example, a situation may arise where a person is granted exceptional leave to remain in the UK on the basis that their country of origin is unknown and their claim to be a British citizen cannot be readily verified. Do you have clients involved in supplying services to overseas customers? Are you confident that they are accounting for VAT correctly? Why not contact the VAT Advice Line on 0844 561 8101 to discuss the implications? Our team of experts have a wealth of experience in place of supply issues and can also provide a written consultancy service at £180 per hour plus VAT.
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