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VAT on the purchase and leasing of an asset by an offshore company
I have a client who intends to open a water softening plant in the Midlands. The venture is being financed in part by a business in Kuwait. One element of the deal is that the Kuwait company will buy some machinery from a UK company for £500 000 and lease it to my client over a three-year period.
I am a little confused about the VAT implications. My initial thought was that the Kuwait company would buy the machinery VAT-free from the UK supplier because it is based outside the EU.
This does not seem right because the goods never leave the UK. However I suspect that the Kuwait company will not be able to obtain a UK VAT number to claim input tax because it does not have a UK base. Or could my client’s factory be classed as a “base”? The VAT issues would then be easy.
...Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
