UK Hosting - Do you pay VAT?

[foz]

Does anyone that resides outside the UK/EU get charged VAT on UK based hosting?

 

[retired_member33]

Yep.

 

[Edwin]

You shouldn't have to pay it in theory, but perhaps the hosting company isn't set up to do the kind of accounting (at the payment processing stage) that would negate the charge.

 

[foz]

You shouldn't have to pay it in theory, but perhaps the hosting company isn't set up to do the kind of accounting (at the payment processing stage) that would negate the charge.

That was my thoughts, but their argument is that the service is UK based.

After checking again with management and accounts, VAT is still applicable, as the service is provided in UK.

Not a big deal, just thought I shouldn't have to pay it. Zero rated.

 

[Edwin]

That was my thoughts, but their argument is that the service is UK based.

Not a big deal, just thought I shouldn't have to pay it. Zero rated.

A quick Google shows me there's a LOT of debate about this on web hosting-related forums. It's an incredibly grey area, since websites are accessible all over the world (including the UK) so at least some of the "supply" takes place locally, for tax purposes. But to the best of my knowledge you theoretically shouldn't be paying VAT. See for instance this page http://www.hmrc.gov.uk/manuals/vatpossmanual/VATPOSS15500.htm which muddies the water by including a "UK branch" in the most relevant example.

 

[monaghan]

If you are outside of the EU, then you should not be paying VAT, popular host billing systems shouldn't add VAT if you correctly identify your address as a non-EU country.

 

[mdrussell]

We've debated this at length with HMRC and our accountants. Because the service is 'used and enjoyed' within the UK for a UK based service (i.e. the servers are in the UK), we have to charge it.

We don't charge VAT to UK/EU individuals using our US based services.

Look at GoDaddy, 1&1, etc... the really big guys that the EU have come after for incorrectly charging it before and are now charging it.

 

[monaghan]

Interesting, what do you do about domain names, you don't know at the point of purchase whether this will be "enjoyed" in the EU or not.

 

[mdrussell]

Interesting, what do you do about domain names, you don't know at the point of purchase whether this will be "enjoyed" in the EU or not.

Encourage users outside the EU to buy from our US brand

 

[looks]

We use Idaq.com and when we have been living in the USA, i just update my address and next time i get an invoice its without VAT. Same with Nominet.

 

[monaghan]

Encourage users outside the EU to buy from our US brand

That's cheating