VAT on overseas work?
Q. I am VAT registered as a window cleaner. I visit my mother in Dublin for one week every two months and do some work while I am there. Do I need to charge VAT on this work or is it not an issue because I am doing the work outside the UK?
A. The starting point is to consider if your customers in Ireland are VAT registered or not. It will be easier for VAT purposes if they are all registered because Irish VAT rules means that the customer will be liable to pay the VAT by doing the reverse charge on their Irish VAT returns, i.e. accounting for output tax and then claiming input tax on the same return, subject to the normal rules.
Tip. This process is known as a reverse charge extension for land services. The UK also applies this rule, meaning that an Irish window cleaner or any other non-UK person working on a UK property, e.g. a builder, would not need to register for and charge UK VAT if the customer is VAT registered in the UK.
If you have customers that are not VAT registered, e.g. private individuals, then you will need to register for an Irish VAT number and charge Irish VAT at 23%.
Trap. A business trading in an EU country where it is not established, like our window cleaner, making taxable sales in that country where the VAT is not dealt with by the reverse charge, gets a nil registration threshold. The business must therefore register for VAT in that country irrespective of its level of sales, e.g. even for a single window cleaning job charging €10.
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