VAT on services between the UK and France

UK VAT may need to be charged on services performed in France or to clients based in France, depending on the type of service supplied. This is a complex area, but broadly, assuming the supplier belongs in the UK and the customer belongs in France, UK VAT will need to be charged on most services unless one of the following exceptions applies.

  • UK VAT does not need to be charged on services relating to land or property situated in France. This includes estate agency, conveyancing, architects, surveying, construction, property maintenance and repair work, hotel accommodation (unless a tour operator), defined exhibition stands, and property management services. More
  • UK VAT does not need to be charged on most services related to a live event or physical activity carried out in France. This includes cultural, artistic, sporting, scientific, educational, training, entertainment, exhibition, conference and valuation services. It also includes actors, singers and interpreters.
  • UK VAT does not need to be charged on passenger transport carried out in France.
  • UK VAT does not need to be charged on most intangible or intellectual services received for business purposes by the French customer. This could include copyright, royalties, licences, other intellectual rights, advertising, consultants, engineers, lawyers, accountants, data processing, written translation, computer programming, software maintenance, internet and website services, sound engineers and technicians, the supply of staff, banking and insurance. If the service relates to land or property situated in the UK, VAT still needs to be charged. If the service is not being received for business purposes by the customer, UK VAT may have to be charged.

With all these services, it is important to look at the precise nature of the underlying service being provided. A business cannot turn one type of service into another by simply changing the description on the invoice.

Other types of services

Different rules may apply to certain less-common services:

Tour operators;
Letting on hire of a means of transport;
Letting on hire of goods;
Valuation or other work carried out on another person’s goods for export from the EC;
Intermediary services (generally agents or brokers working for a commission);
Training services supplied to overseas governments;
Freight transport;
Telecommunications services;
Radio and television broadcasting services.

Additional services rules

The UK business is still able to reclaim any UK VAT on expenses which it incurs in providing a service which is deemed to be outside the UK, providing that the service would be taxable if it was made in the UK, and subject to the normal rules about reclaiming input VAT.

If a VAT-registered UK business receives a service from a French supplier, and the place of the service according to the above rules is in the UK, the UK business may need to ‘reverse charge’ that service. If the UK business is not registered for VAT, and the service is under Schedule 5, the value of that service will be included in the turnover of that business in determining whether it needs to register for UK VAT.

Any service which is not subject to UK VAT under the above rules may be within the scope of French TVA. A UK business providing a service within the scope of TVA should consider whether it needs to register for TVA, and then charge and account for it, according to French tax law. This is beyond the current scope of this site, but more detailed information can be found here.