VAT for client that generally works offshore

I have a client that mostly works offshore and therefore does not include VAT on his invoices to his client (both businesses are UK businesses). However, occasionally my client will work from home (in the UK). My question is whether my client will need to keep a record of the hours worked at home and charge VAT on these hours or as he generally works offshore can all the hours be charged exclusive of VAT?

What does offshore mean? Do you mean your client (the business) is not UK established (ie, based in the EU/rest of the world) or do you mean they are offshore, as in working on an oil rig or similar? Generally, place of supply of services is driven by the location of the (business) customer, not where the person doing the work lives/is doing the work. So if your client is a UK based entity (company, sole trader, etc) and his customer is a UK based business, then UK VAT would apply to all sales, regardless of where the individual physically performs the work. There are exceptions to this rule, such as services involving land related supplies (such as geology surveys, architect, etc) and so suggest you read up on the Notice 741A https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec6

Hi Jason, the client generally works on an oil rig, this is what I mean by offshore. I have read the link, and it seems as per the lands related supplies, that as the rig is outside UK waters then he would not charge VAT. My question is, for any work that he carries out at home (at his house in the UK) would he need to invoice this separately (with VAT) or because the vast majority of the work is carried out on the rig, can the work he carries out at home be included in the invoices that do not have VAT included?

Hi,

Your client will need to determine the place of supply of his supply to decide whether or not UK VAT is applicable.

You can find guidance in VAT Notice 741A, in particular section 6 regarding B2B supplies and also section 6.4 regarding additional rules for certain services.

Place of supply of services (VAT Notice 741A)

Thank you.