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Do I charge Irish VAT? Must I register for UK VAT? Are there special rules for services?

There are special rules that apply to VAT in respect of services and the charge to VAT will depend on the type of service supplied and also the deemed place of supply. From 1 January 2010 there is a general place of supply rule depending on whether the customer is a business or a consumer. The general rule for the supply of services to a business is the place of supply will be where the customer is based (i.e. Northern Ireland). The customer must then account for the VAT under the reverse charge mechanism i.e. the customer will charge themselves VAT on the services they receive and provided that the services are received for the purpose of their taxable trade they will also be able to claim a deduction for this VAT. If the supply is to a consumer, then the place of supply will be Ireland and Irish VAT must be charged. There are some exceptions to this general rule as follows

The main exceptions relate to:

  • Land/Property related services.
  • Passenger transport.
  • Cultural/educational events.
  • Hire of means of transport.
  • Service involving physical performance.
  • Restaurant and catering services.

However please note that this is a highly complex area and you should seek professional advice specific to your own circumstances.

If you provide services which are deemed to take place in the UK either through a branch or due to one of the above exceptions, the VAT registration threshold which applies to non UK establish persons is £1 and UK VAT registration will be required.

Additional rules have been introduced from 1 January 2015 for suppliers of digital services to non-VAT registered customers in other EC countries. Some examples of digital services include:

  • Online advertising
  • Distance maintenance of programmes or equipment
  • Sale of images or text, such as photos, eBooks, films and games

Information can also be found on the Revenue Commissioners website at www.revenue.ie and at the HM Revenue & Customs website at www.hmrc.gov.uk

Boxes ES1 and ES2 on your VAT return are used to record EC transactions of services. An EC VIES returns would also be required to be completed in respect of the EC supply of services.

The above rules apply to services provided within the EU Single Market and therefore this may change when the UK leave the EU on 29 March 2019.