Services supplied outside the scope of VAT

Outside the scope of UK VAT

Outside the scope of VAT means that:
You do not charge VAT on the sales.
You do not include the sales figures in your VAT returns.
Different rules apply for Corporation Tax and self employed sole trader income tax.
"Outside the scope" is not the same as zero-rated.
This is an important distinction for VAT flat rate scheme traders.
It will be important if you wish to avoid compulsory VAT registration and relevant services apply.

Sales when you are not registered for VAT.
AND you do not need to be registered.
See VAT registration compulsory - voluntary.
Statutory fees and services, eg
MOT testing - particularly important for motor repairers on the VAT Flat rate scheme.
Congestion charge.
Personal sales:
Occasionally,
And not as part of your business,
And for private purposes such as hobbies.
Take care to avoid an HMRC inspector disagreeing with your view during tax enquiries or investigations.
Donations to charity where the giver does not receive anything in return.
Tolls for bridges, tunnels and roads operated by public authorities.
Low cost welfare services provided by charities.

If the place of supply of your service is not in the UK, then your supply of services sale is outside the scope of VAT.
Place of supply depends on place of belonging.
Normally place of belonging is decided by the 'general rule'.
Business customer - where the customer belongs; do not charge VAT.
A UK registered limited company will always belong in UK; do charge VAT.
unless the service is supplied to an overseas company, outside UK, who own the UK company; do not charge VAT.
Non-business customer - where the supplier belongs; do charge VAT.
Certain services:
Non-business customer where the customer belongs; do not charge VAT.
Including:
advertising,
intellectual property rights,
legal services,
accountancy; unless to a UK company see above.
Special rules for the place of supply:
Hiring out a means of transport.
Land and property services.
Events.
Intermediaries.
Work carried out on goods.
Transport.
Check Special rules for the place of supply
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Subject to a number of conditions, most of which are not considered here:
Transfer of a business as a going concern (TOGC), by law, is ‘neither a supply of goods nor a supply of services’ and is therefore outside the scope of VAT.
Where the seller is VAT registered the purchaser must be VAT registered or must become VAT registered as a result of the Transfer of the business as a going concern (TOGC).
If you purchase a business with past sales in excess of £ per year, rate effective from this will be a compulsory VAT registration.