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Posted Wed, 30 Nov 2022 22:30:13 GMT by Andrew DT
Dear HMRC colleagues. We designed software as a service product that people could access and use online via a web browser or mobile device. Similar to how Mailchimp etc works. I have the following questions: 01. Will these software products be VAT-taxable goods or services? 02. We sold the software to US-based clients. Will these sales be accounted as UK VAT-taxable sales? Should we include them in box 6? Best regards Andrew
Posted Mon, 05 Dec 2022 13:49:32 GMT by HMRC Admin 19
Hi,

In response to your questions:
  1. This is a service as it is not a tangible item.
  2. The VAT treatment of services very much depends on the business status of your client. The general rule for business to business (B2B) services is that the place of supply of that service is where your customer belongs. In this scenario that is the US making the supply outside the scope of UK VAT. If your customer is a member of the public then the general rule is that the place of supply is where you belong, irrespective of the location of your customer. You will need to refer to VAT Notice 741A in order to establish the correct position.

Place of supply of services (VAT Notice 741A)

Thank you.

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