VAT on copy-editing services for US customer?
Thread poster: Will Kelly
Will Kelly
United Kingdom
Dutch to English
Mar 8

Hi all. I'm based in the UK and VAT-registered. I normally supply translation services to EU customers only, but have my first US customer (B2C) and have just spent a frustrating half hour speaking with HMRC on the applicability of VAT to the project I'm about to do, namely copy-editing a book. It turns out HMRC are only clear-cut on such matters when investigating, but when it comes to being asked for advice they prefer the 'ball's in your court approach'.

So, I'd really appreciate some advice on whether or not to charge VAT on such services to my US customer. I also hope this thread will prove useful for others in my position, so I'll make sure it's sufficiently detailed/evidenced. If I charge it and it wasn't chargeable, he'll be out of pocket by several hundred pounds. If I don't charge it and HMRC suddenly take the concrete position that it was chargeable, I'll be out of pocket by several hundred pounds.

Here's the document HMRC said I need to interpret myself: https://www.gov.uk/government/publications/vat-notice-741a-place-of-supply-of-services/vat-notice-741a-place-of-supply-of-services.

And here's a useful interpretation from an accountancy firm: http://www.brighton-accountants.com/blog/vat-uk-usa/. Let's start with this. It suggests that consultancy (I guess copy-editing could be deemed language consultancy or similar professional service) is covered by the 'general rule', which I know from my discussion with HMRC this morning is discussed in section 6 of the document above. Specifically, 6.2 states that '[t]he general rule for B2C supplies of services is that the place of supply is where the supplier belongs, irrespective of the location of their customer'. In other words, I'm in the UK, my customer is not a business, therefore the place of supply is the UK.

Or is it? Section 12 of the same HMRC document suggests this might not be the case. It starts off (12.1) by saying section 12 applies if you belong in the UK, you supply B2C services to customers who belong outside the EU and those services are included in the list in paragraph 12.2. The list in paragraph 12.2 includes consultancy, and stipulates that it is 'treated as supplied in the place where the customer belongs when provided to non-EU non-business customers'. Now I'm confused, because the HMRC document seems to be saying the exact opposite of the 'useful interpretation' from the accountancy firm!

There must be some people here who have found themselves in a similar position. I'd really appreciate some clear advice, and hope it will prove useful for other translators/proofreaders searching this forum.


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VAT on copy-editing services for US customer?

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