Reverse charge company VAT

A friend has a new business in the construction industry, they work for a client in the EU providing services to building companies here.
Their accountant says they need to charge VAT.
Their client says no because she is a reverse charge company
HMRC said their client was right - but only over the phone they will not commit on paper or anything.

I think they need a new accountant but does anyone who understands have an idea about who is right?

Thanks in advance (I am so glad I am PAYE).

Replies

  • comeandgocomeandgo Forumite
    5.4K Posts
    Tenth Anniversary 1,000 Posts Name Dropper
    Forumite
    The reverse charge vat can be used in some circumstances in construction work.  I can’t supply a link but if you go to the government vat pages and search for reverse charge vat you should be able to get the flow charts which show when reverse charge vat would be applicable.
  • MarconMarcon Forumite
    7.6K Posts
    Sixth Anniversary 1,000 Posts Name Dropper Combo Breaker
    Forumite
    A friend has a new business in the construction industry, they work for a client in the EU providing services to building companies here.
    Their accountant says they need to charge VAT.
    Their client says no because she is a reverse charge company
    HMRC said their client was right - but only over the phone they will not commit on paper or anything.

    I think they need a new accountant but does anyone who understands have an idea about who is right?

    Thanks in advance (I am so glad I am PAYE).
    She needs to ask her accountant to refer her to the relevant part of the legislation. That will do one or more of the following:

    • concentrate the accountant's mind and help them to identify if they are right or wrong
    • check that the question your friend asked her accountant and HMRC is the same one (not as stupid as it sounds)
    • get a definitive answer for your friend
    • identify if she needs a new accountant!


    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
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