- VAT applies to most services provided by VAT-registered businesses in the UK
- Services are intangible activities performed for customers
- VAT must be charged if the business is VAT-registered, services are supplied in business, services are not VAT-exempt, and UK VAT applies
- Standard rate VAT is 20 percent for most services
- Reduced rate VAT is 5 percent for specific services like domestic fuel and energy-saving materials
- Zero rate VAT applies to exported services, international transport, and certain EU supplies
- Exempt services include banking, insurance, medical care, education, postal services, betting, and burial services
- VAT is due on the earliest of invoice date, payment receipt, or service completion
- Business-to-business services are taxed where the customer is located
- Business-to-consumer services are taxed where the supplier is established
- Service invoices must include specific details like supplier and customer information, invoice number, and VAT details
- Mixed supplies require determining if they are single or multiple supplies for VAT
- Disbursements may avoid VAT if conditions are met
- International services need careful analysis for place of supply and reverse charge procedures
- Common compliance issues include incorrect VAT rates, place of supply errors, and inadequate invoice documentation
Source: deeksvat.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
