Input VAT reclaim on purchases of goods and services from outside UK

Hi, Can someone explain if we can reclaim input VAT on purchases of goods and services from overseas suppliers who are UK VAT registered? Thank you

Hi,

If the overseas supplier is VAT registered in the UK and is bound to charge VAT on a supply of goods and services in the UK then you can treat the VAT as input tax in the normal way.

Please see the guidance below:

VAT guide (VAT Notice 700)  Section 10

Thank you

Hi, Thank you for the reply. Just to clarify, should the purchase of software services from an overseas supplier with a GB VAT number and an HMRC address be treated as a normal transaction to claim input tax, or should the reverse charge mechanism be applied?

Hi,
The reverse charge will come into play if the UK VAT registered business belongs outside the UK for the purposes of the supply. The guidance states:

The reverse charge applies to almost all B2B supplies of services except exempt supplies. It does not apply to land on which the option to tax has been exercised, read section 7 for more details. In this circumstance the non-UK supplier must register and account for VAT in the UK.

The reverse charge is not a complicated accounting procedure. Where it applies to services which you receive, you, the customer, must act as if you are both the supplier and the recipient of the services. It applies if your supplier belongs outside the UK even if they have a UK VAT registration number.
Thank you.

Hi, I am a bit confused because, according to HMRC Admin 19, the reverse charge applies to overseas suppliers even if they have a UK VAT number. However, HMRC Admin 13 stated, 'If the overseas supplier is VAT-registered in the UK and is required to charge VAT on a supply of digital services in the UK, you can treat the VAT as input tax in the usual way.' Could you please clarify the correct VAT input-claim treatment for a UK VAT-registered overseas supplier charging VAT to a UK VAT-registered business customer? Thank you.

Hi,
You would need to check with the supplier to make sure that they are treating the supply correctly.
If they are charging VAT on the supply because they belong in the UK for the purposes of the supply then VAT would be charged and subject to the normal rules of input tax you would reclaim the VAT charged as your input tax.
If your supplier is not charging you VAT because they belong overseas for the purpose of the supply then they will not charge you VAT and you will account for the reverse charge on this supply. You can see guidance here:
Introduction to input tax
Reverse charge
Thank you.