The VAT Threshold

I run a LTD company. An individual from the EU performed services for me on the basis of a signed contract for specific work. Does the value of such a service count towards the VAT UK registration threshold? I will be grateful for your response.

https://www.gov.uk/hmrc-internal-manuals/vat-place-of-supply-services/vatposs14700 Yes, services* purchased from outside the UK would be reverse charge, this means you treat the purchase as a sale (sell to yourself) and the purchase therefore counts towards the VAT registration threshold. For example, your UK turnover is £70k. You buy in consultancy and legal services from overseas and the value of those purchased services add up to £20k. £70k + £20k = £90k and therefore over the VAT registration threshold, your business would need to register for VAT. Remember the threshold is a rolling 12 month calculation, thus include your overseas purchases of services in with your sales income each month to see if the threshold is breached. *you should also read the Public Notice 741A section 6 to better understand the default rules for services. https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec6

Hi Patrycja M, 

If the work by the overseas supplier was subject to the reverse charge by the business customer ie you, then the value would go towards your taxable turnover.

Please see the guidance below:

Place of supply of services (VAT Notice 741A)

Please see section 5.7 of this notice.

Thank you. 



 

Hi I went over the VAT threshold on a one off job which completed 31stMarch 22 I didn’t realise till 1oct 22 when I completed my accounts and I wrote to HMRC. I’ve had no response at all since then I have completed self assessment. I’ve been trying to ring up and nobody knows what I’m talking about in the VAT department. So I’ve tried ringing the self assessment and there isn’t an option for it and then I get cut off.

Hello Mandy Mason
I think you are referring to the fact that you requsted exemption from registering.
Please contact that team on 0300 322 9064 their lines are open 9-5.
Thankyou.
Regards.