When you sell services to a VAT-registered business in another country, you apply a rate-rated VAT. This includes services sold to the EU and the rest of the world.
Services sold within the UK, including between Great Britain and Northern Ireland, count as home sales.
Cause
Resolution
Create a sales invoice
Go to Sales, Sales Invoices, and select New Invoice.
In the Customer field, select your overseas customer from the list, or type the customer name. If the customer isn’t a saved contact, select Add a customer to create a record for them.
NOTE:
Make sure each customer has the correct country set on their address and a VAT Registration Number where applicable.
On the first invoice line, select a service from the list.
In Goods/Services select Services (standalone). The system applies zero-rated VAT and doesn't allow you to edit it.
Repeat on a new line for as many items as you need to add to your invoice.
Select Save.
The VAT Return
Sales of services appear in Box 6-total value of sales and all other outputs excluding any VAT.
Because VAT on these sales is zero-rated, no VAT value appears on the return.
If the business uses the flat rate VAT scheme, only Box 6- the total value of sales and all other outputs excluding any VAT changes.