VAT on land and building services supplied in, to or from France

VAT on land and building services mainly depends on where the land is situated.

What are land and building services?

These are services related to all forms of land and property, including any structure permanently fixed to the land. They do not normally include services related to machinery installed in buildings, except where the machinery is a fixture.

Such services include:

  • Renting land or property, including hotel accommodation or a site at an exhibition;
  • Building and construction work, including demolition, repair and maintenance;
  • Professional services relating to land, including estate agents, solicitors, property management services, architects, surveyors and engineers;
  • Hiring plant or machinery, with an operator, for work on a construction site.

Land and building services do not include:

  • Tour operator services, such as reselling hotel accommodation;
  • Seconding staff to a construction site;
  • Services relating to land and property in general, rather than a specific property or site;
  • Hiring plant or machinery without an operator;
  • Accounting or tax services relating to income from land or property;
  • The supply of a major interest in land (eg, a lease lasting over 21 years).

VAT position if the land is in France

The service is not subject to UK VAT, but is within scope of TVA, even if both the supplier and customer belong in the UK.

If the customer is not TVA-registered, a UK business may need to register for TVA and then charge TVA, according to French tax law.

If the customer is TVA-registered, a UK business can probably avoid liability for TVA as reverse charging will apply.

VAT position if the land is in the UK

Regardless of where the supplier and the customer belong, all services are within the overall scope of UK VAT.

Land and property services may be exempt from UK VAT, or they may be chargeable at the zero rate, the 5% reduced rate or the standard rate. This is a complex area of VAT in the UK, and reference should be made to VAT Notice 708 Buildings and Construction, and VAT Notice 742 Land and Property.

A VAT-registered UK business receiving a service relating to land or property in the UK, from a French business, may need to apply reverse charging.