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04 January 2017
Should VAT be charged by a company based in Malta for work in the UK?
I act on behalf of a client whom we can call Mr Trusting. His UK company Property Ltd is a property developer. Mr Trusting has a friend Mr Chancer who ‘finds’ UK properties that Property Ltd can buy develop and sell on. For this service Mr Chancer charges Property Ltd £150 000 a year for ‘consultancy fees’. These fees are billed by Mr Chancer’s Maltese company Malty Ltd. However we understand that Mr Chancer himself is in the UK most of the year. Property Ltd’s income is entirely from UK sources and is mostly zero-rated for VAT purposes.
My question is whether Malty Ltd should register for UK VAT and charge UK VAT for its work for Property Ltd. If it should and it does not could Mr Trusting and Mr Chancer find...
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