VAT Question of the Week (29th July 2016)

blog-publish-date

19 Jul 2016

blog-read-duration

Q. My client is an estate agent. In the past his services have always been in connection with the sale of properties in the UK. However, he has recently entered into an agreement with a Spanish property developer to act as his agent in selling newly built homes in Spain. My client will receive commission from the Spanish property developer based on a percentage of the sales value of the property. Please can you confirm whether or not he should charge VAT on these commissions? A. As your client supplies services that relate to land or property, the place of supply of those services is where the land itself is located, irrespective of where your client or his customer belongs. As these properties are in Spain, the place of supply of your client’s services is also in Spain and therefore outside the scope of UK VAT. However, if the value of commission received by your client exceeds the VAT registration threshold in Spain (which for businesses that do not have an establishment in the member state where the supplies are made is usually nil) your client may be liable to register for VAT in Spain and charge Spanish VAT to the property developer. If your client does not wish to register for VAT in Spain, it may be possible to avoid registration if the Spanish VAT authorities exercise the extension to the reverse charge rule; this would allow the Spanish property developer to account for the VAT in Spain under the reverse charge mechanism. Do you have clients involved in selling services to overseas customers or buying from overseas suppliers? 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.

VAT Question of the Week takes a break next week but will return on Friday 12th August.

Free to Download Employer Resources

  • Model Apprenticeship Agreement

    FREE DOWNLOAD

    Model Apprenticeship Agreement

    Read more
  • Sample COSHH Assessment Record

    FREE DOWNLOAD

    Sample COSHH Assessment Record

    Read more
  • Return to Work Interview Form

    FREE DOWNLOAD

    Return to Work Interview Form

    Read more
  • BLOG

    Avoiding Slips, Trips and Falls in th...

    Whether your staff is in an office or on a construction site, every workplace ha...

    Read more
  • BLOG

    Daylight Saving Time: The Implication...

    Daylight Saving Time is coming to an end on Sunday 27 October, with the clocks g...

    Read more
  • BLOG

    Jury Service: Employer Obligations

    One of your employees has jury service—now what? Your business will no doubt hav...

    Read more
  • REC

    CASE STUDY

    REC

    The events are brilliant. Amanda Chadwick, one of the expert speakers, is a very

    Read more
  • Grantley Hall

    CASE STUDY

    Grantley Hall

    Whenever we have a sensitive issue - sometimes involving individuals with protec

    Read more
  • Lady Heyes Holiday Park

    CASE STUDY

    Lady Heyes Holiday Park

    Overall it's definitely had a noticeable impact on the business and how I perfor

    Read more

Do you have any questions?

Get a free callback from one of our regional experts today