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Posted Tue, 02 Jul 2024 13:39:11 GMT by Londonquery Charles Desmond
We have a private limited company and approximately 80% of our B2B professional services are supplied overseas to US customers and believe these fall outside of the scope of VAT as the customers are based in the US. I just wanted to check whether this would cause any impact on our ability to reclaim 100% of VAT inputs incurred on valid UK business purchases (eg. data subscriptions, contractors etc.) needed to deliver the services to the US customers. In the past I have come across businesses suffering irrecoverable VAT (not sure why - perhaps too high a percentage of its UK turnover being exempt from VAT?) and wanted to check whether we are likely to suffer that issue as well.
Posted Thu, 04 Jul 2024 16:16:07 GMT by HMRC Admin 25 Response
Hi Londonquery Charles,
Outside the scope supplies are not the same as exempt.
As long as those supplies you are making to overseas customers would be taxable if made within the UK then this would not affect your ability to recover input tax.
All input tax claims must meet the conditions in notice 700 sections 10 to 13.
10. Introduction to input tax
Thank you. 

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