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HMRC have noted that some businesses within the telecommunications, internet service provision and broadcasting sectors have implemented arrangements to move the place of supply of their services from the UK to other EU countries to take advantage of more favourable VAT rates.
This is on the basis that the place of supply of telecoms, ISP and broadcasting services, when provided to non-business customers in the EU, is the place where the supplier is established.
The Revenue is checking all such arrangements, warning that department will will mount a 'robust' challenge whenever it considers there are sufficient human and technical resources in the UK to form a fixed establishment from which the services are supplied, or where the entity purporting to make the supplies does not have a sufficient presence in the other member state to be established there.
