VAT advice on service outside EU

My first post so I hope I have the right forum.

I'm also not sure I have made a good job of the Thread heading either.

My question is both simple and complex. It relates to a solicitor charging VAT for a service.

Property is held in Northern Ireland.
Solicitor is in Belfast.
Solicitor provides a legal service to Entities:
1. Myself (Warwick)
2. My brother (call him Phil)
3. My sister (call her Mich)
4. A Trust held for another brother (call him Jim) and administered by Phil and Mich.

Now Warwick and Mich live in Australia (citizens),
Phil lives in Canada (citizen)
Jim lives in the UK (citizen)

Solicitor (and others) provide services on our (joint) behalf - selling, negotiating, valuing etc property held by the 4 entities. Should the solicitor be charging VAT on the service which is provided to 3 of the entities residing totally outside the EU ?

I understand the Trust may be liable for VAT.

Entities 1,2 & 3 have no businesses, registered or otherwise, in the UK.

I hope this all makes sense. I look forward to your thoughts.

Regards
Warwick

As far as I recall from UK VAT, VAT is applicable on property transactions if the property is located within the UK - hence if the property is located in NI then the solicitor is proper in charging UK VAT on his services. It also depends on where the supply of service actually took place. The solicitor is based within the UK so therefore the service is provided within the UK so therefore, again, he is correct in charging VAT on his service.

Hi Louthlass,

Thanks for the very quick response. I understand that if the transaction was for the selling of property, then VAT would be payable. In this case it was for a service they provided for us in relation to a Deed. I enclose the wording but with any identification material removed/changed.

Professional Fee raised in connection with all work undertaken in respect of the negotiation and completion of the Deed of Consent relating to <Property> and for legal services based on time worked, financial value of advice, skill employed, complexity of issues raised, responsibility carried, speed of response, for attending and advising throughout, for general care and attention and other relevant factors in accordance with the Solicitors Remuneration Orders (1976)

The reason for my question is about this type of transaction - there are many going on, and the very small amount of information I gleaned from the following:

VAT on imported services is generally charged at the same rate as if the service was supplied by a UK business. Exports of services are generally zero-rated. See our guide: [broken link removed]. However the rules can be complex depending on the circumstances, eg if you are supplying a service to a customer based overseas but with an office in the UK. If you are in any doubt, ask your accountant or contact the HMRC National Advice Service Enquiry Line on Tel 0845 010 9000.


Would this additional information make a difference to your original assessment ?

Thank you again for your input and help

Warwick

Hi bigwozza,

I'm afraid that I still stand by my previous post in relation to your query. To put it simply, the physical presence of the property is in the UK, the solicitor is providing advice and services based on the location of the property and administering such services relating to UK law and regulations therefore he is providing a service within the UK regardless of where his customers are based. If he was subject to an audit by a VAT inspector I highly doubt he would be able to argue his case as to why he invoiced his supply with exemption to VAT. I take on board your views as to supply of service outside the UK but the very nature of the supply in question can be wholly traced to a UK interest. I know this is probably not the answer you hoped for, the whole question regarding supply of service is very complex and it can appear as if HM Revenue & Customs do not make it any easier but I do believe this would be the line that they would take.

I hope this helps,

Kind regards

LL

@bigwozza, while not wishing to appear disparging of LouthLass's responses to you query, you should perhaps be aware that the focus of this site, and by and large the expertise of the contributors, relates to Irish law, property and financial matters.

I mention this as I'm sure there must be a UK equivalent of AAM where you might have access to a greater range of opinion / expertise on UK-related matters.

I'd like to thank those have responded (all of them). I wold particularly like to thank LouthLass for their patience and understanding that I am in no way up on these matters.

I will take on board your thoughts and will not raise the issue with the Solicitor in question - he has been working for the family for 10-12 years and have no problem with the charges - I was just curious.

Now my curiosity has been fed and watered I will put this one to bed

thanks again

Warwick

Hi Warwick,

I'm sorry it wasn't the response you were looking for. As mathepac also advised it may be prudent to look for a UK equivelent of AAM however I lived and worked in the UK for a number of years and my previous job was primarily dealing with UK VAT matters so I think that I have a fair idea of how it is applied.

As you also said, your solicitor has worked for your family for over 10 years and you have been happy with his services to date so it may not be wise to question him at this stage.

I wish you all the best.

Kind regards

LL