Place of supply ofr

My company builds custom software solutions. My customer is headquartered in the EU and their central IT function is based there. They provide IT support and services to the operating company based in the UK (amongst others). One of the solutions we develop is installed on UK laptops and used by UK users. The customer has requested that we invoice their EU HQ company with 0% VAT. I am concerned that the place of supply under use and enjoyment rules is actually the UK and we should be charging VAT. Any thoughts?

Hi,

If you are providing electronically supplied services and your business customer is overseas then the supply would normally be outside the scope of VAT. You can see guidance here:

The place of supply rules for services

However if the business customer consumes the services in the UK then under the use and enjoyment rules the place of supply would be deemed to take place in the UK and so UK VAT would need to be added. Please see guidance and examples below:

Use and enjoyment

Thank you.