The Notice has been updated with reference to changes to the ‘use and enjoyment’ provisions for telecommunication services provided to non-business customers (B-C).
For business to business (B-B) supplies the rules are unchanged. The place of supply is where the customer belongs, subject to the use and enjoyment provisions. For B-C supplies the use and enjoyment provisions have been removed. The use and enjoyment provisions apply where under the general rule the place of supply would be in the UK but the service is actually consumed to some extent outside the EU, or where the place of supply would be outside the EU but the service is consumed in the UK.
B-C rules up to 31 October 2017
Previously, B2C supplies of telecoms to UK residents in the UK were subject to UK VAT; however, if a UK resident used telecoms services outside the EU which were under a contract with a UK provider, those services were outside the scope of UK VAT because the use and enjoyment were outside the EU.
Those telecoms services used in the UK by a visitor from outside the EU were also subject to UK VAT – examples of these services are the use of a hotel phone or a payphone. However, telecoms services used in the UK were ignored if they were part of an established telephone contract, supplied to a non-EU temporary visitor and HMRC were satisfied these conditions were not subject to any abuse.
The change from 1 November 2017
Supplies of B-C telecoms services by UK suppliers to UK residents are now subject to UK VAT irrespective of where those services are used.
Those supplies to visitors from countries outside the EU are outside the scope and no longer subject to UK VAT.
For UK suppliers of telecoms services, this should simplify their VAT accounting, although they do still need to consider where businesses use their services and apply an apportionment where the customer is using the service both in the UK and outside the EU.
If you have a VAT query why not contact the VAT Advice Line on 0844 892 2470 to discuss the implications. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.
