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Advice required on when VAT should be charged on business supplies to overseas customers.
I am concerned that VAT advice given by HMRC’s telephone helpline service to two of my clients might be incorrect.
- The first client provides transport services through a fleet of lorries. We have always told him to follow the general business-to-business (B2B) rule; in other words it is all about where his customers are based. So he should charge VAT to UK business customers but not to those outside the UK – the latter being outside the scope of VAT. However a UK business customer queried a VAT charge on the basis that the goods my client shipped from Leeds to Southampton were destined for the Channel Islands. HMRC agreed with him and said the service should have been zero-rated. But is this correct?
- The second client is an architect based in London who drafted some plans for a friend...
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