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Posted Wed, 29 Nov 2023 09:55:52 GMT by Creditcontroller1
We are a UK based recruitment agency who employs a UK based worker to carry out work for a client based in India. ( No UK office) We process payment to the UK worker and charge the client the same cost with a small margin on top. We have read the Supply of Staff Guidance notice 700/34 but don't think it's clear if VAT is chargeable. Years ago we were audited and were told Place of Supply rules meant VAT was chargeable to client in India but we think rules may have changed since then. Could anyone advise please ?
Posted Thu, 30 Nov 2023 12:13:12 GMT by HMRC Admin 20 Response
Hi Creditcontroller1,
Please refer to notice 741a for guidance on place of supplies of services.
If the supply of staff is business to business (B2B), then the general rule is the place of supply is where the business customer belongs.
If this is outside the UK, then this is outside the scope of UK VAT. Section 6.3 of notice 741a provides guidance on this.
Place of supply of services (VAT Notice 741A) 6. The place of supply rules for services
Thank you.

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