VAT for equipment hire to non-UK company

[richard]

Hello

I have a Dutch company bringing a show to our venue in London, they need to hire some stuff locally.

They have been given advice by accountants that the UK supplier shouldn't need to charge them VAT on the hire of the kit as they can do a reverse charge into the Dutch system. I've looked on line and I *think* think may be correct, however it isn't clear. The supplier in question is currently saying no - as they aren't aware of how this would work.

This is obviously up to the supplier, but it would be good to know if anyone has experience of this and if so anything I can tell to either side to get it resolved happily!

Thanks!

Richard

[dje]

If you are delivering the equipment to the UK venue then I am fairly sure you will need to charge VAT.

Exempting VAT for foreign suppliers only works when you are exporting things. If it is sent to a UK address then I believe VAT is chargeable.

[Derek Tallent]

The Dutch are correct.... 

[sunray]

I'm certainly not an expert, having never been involved as vat registered, but my gut feeling is buying VAT free is surely an export thing. If the purchase/hire is for use in the country of procurement why should it be VAT free.

I don't expect to pay VAT free when I go abroad unless I make an export declaration.

As said I don't know though 

[Brian]

On 3/15/2023 at 10:32 PM, Derek Tallent said:

The Dutch are correct.... 

BUT...the supplier will need to do extra paperwork. And if they aren't regularly doing it have probably decided it's just not worth the effort.

[kerry davies]

I am pretty sure we were highly irregular but the only times I ever got peripherally involved in hiring kit for overseas companies visiting UK we hired it and paid the VAT then reclaimed it as normal. Costs were then deducted from their fees etc. IIRC the supplier of an Olympic standard trampoline wouldn't even accept the order from the visiting troupe.

A PM to ImagineerTom would be almost certain to get specific answers but your accountant may have a handle on "place of supply" rules which, like everything, have all got a lot more fiddly since Brexit.

[richard]

Thanks all - your answers pretty much agree with most of what I've been told, although one supplier has told me the "place of supply" only changes to Holland if the hire is a wet hire (in the UK), for dry hires they believe VAT is still payable in the UK.

I think the main thing is that the supplier in question won't want to take the risk of HMRC disagreeing with their interpretation and making them re-pay the VAT - and unless we want to pay them for a load of accountancy consultation they probably won't change their mind!

[ImagineerTom]

I'm not an accountant.

There are systems and processes in place so that (as Dutch co say) they are not charged VAT as you're providing the service to a non UK company but / and they then have to "import" and at the end of the gig "export" the items with all the related paperwork and logging; exactly as if you'd rented it to them, shipped it to their warehouse in holland and they brought it over in their truck and took it back at the end only to later ship back to the rental co.  However, if anyone gets any of the paperwork wrong or if revenue / customs decide they want to look at this transaction a lot closer than normal then costs / penalties start racking up fast so if the VAT amount is only a few thousand then it would be cheaper and more sensible to just charge the VAT and know that the matter is closed. 

A lot of business's in Europe don't understand the details of how the trading relationship with the UK has changed and that (despite politicians hinting otherwise) the deal we have isn't simple or "zero tarif" nor is it like the deals EU has with any other country so we have already experienced problems and had to educate companies that their accountants general advice is wrong because of the special deal the uk has.