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Services received from overseas - reverse charge - taxable turnover?

17/05/2019 07:37:13
Para 2.1 of MTD notice states - VAT taxable turnover is the total value of everything you sell that is not exempt from VAT or outside the scope of VAT.

If a business has supplies of taxable goods/services under the VAT threshold, but also reverse charge services received from overseas, is it only necessary to consider the value of taxable sales when considering if MTD is mandated, or does the value of reverse charge services received also have to be considered?

Some businesses need to be registered for VAT solely because of reverse charge services received and make no taxable supplies. Are they mandated due to the level of reverse charge services over the VAT threshold, or not mandated as they don't make any taxable supplies?

Thanks
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Re:Services received from overseas - reverse charge - taxable turnover?

17/05/2019 09:08:59
Hi

Hi
VAT taxable turnover is the total value of everything you sell that is not exempt from VAT or outside the scope of VAT. However, it also includes deemed supplies. Deemed supplies include supplies of B2B general rule services from overseas suppliers (that are treated as supplied where the recipient belongs).

This means that you need to consider the value of reverse charge supplies when checking if you have to follow MTD rules. Businesses that are registered solely due to the level of reverse charge supplies will be mandated if they exceed the £85,000 threshold.

VAT Notice 700/1: should I be registered for VAT provides more information on the VAT registration threshold and taxable turnover:

VAT Notice 700/1


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Services received from overseas - reverse charge - taxable turnover?

21/05/2019 07:26:17
Thank you

I think therefore your para 2.1 of MTD notice needs to be amended, as it is misleading!

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