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Where Taxpayers and Advisers Meet

Expat in USA. PAying VAT on PPI claim payments

expatman
Posts: 3
Joined: Tue Mar 10, 2020 3:13 pm

Expat in USA. PAying VAT on PPI claim payments

Postby expatman » Tue Mar 10, 2020 3:23 pm

Hello,

I'm British, live in the USA and have paid my taxes over here for 10 years or so and don't do any UK tax returns.

I put in a successful PPI claim through a UK company. The pay out was sent to my UK bank and I'm sending the money out of the UK to my account in the USA.
The PPI company has invoiced me for the agreed percentage PLUS VAT.

The question is should I be paying VAT on the service they provided? I wish to see this as an EXPORT which doesn't attract VAT.
If not how do I convince them to drop the charge ?

Thanks
Alan

expatman
Posts: 3
Joined: Tue Mar 10, 2020 3:13 pm

Re: Expat in USA. PAying VAT on PPI claim payments

Postby expatman » Wed Mar 11, 2020 12:08 pm

Just to clarify they're charging me VAT on their fee.
Eg
1000 ppi payout
200 agent fee
40 vat

Trevor S
Posts: 50
Joined: Tue Jan 01, 2019 12:37 am

Re: Expat in USA. PAying VAT on PPI claim payments

Postby Trevor S » Wed Mar 11, 2020 1:29 pm

The PPI agent is supplying a service to you, rather than exported goods. As detailed in HMRC's notice 741A, the requirement to charge VAT on services is based on the place of supply. For most B2C (business to consumer) transactions, the place of supply is the country where the supplier belongs.

Therefore I believe they are correct to charge UK VAT on their fee. The contract between you and them should specify whether VAT is included within or additional to the agreed percentage.

Trevor S
Posts: 50
Joined: Tue Jan 01, 2019 12:37 am

Re: Expat in USA. PAying VAT on PPI claim payments

Postby Trevor S » Wed Mar 11, 2020 7:06 pm

An exception to the general rule is provided in section 12.6 of notice 741A. I don't know whether your agent's services would fall into this category, but it's probably the only exception which may apply. You could always direct your agent to that section if you believe that it covers the supply, but ultimately it will be the agent's responsibility to ensure that they're treating the VAT correctly.

expatman
Posts: 3
Joined: Tue Mar 10, 2020 3:13 pm

Re: Expat in USA. PAying VAT on PPI claim payments

Postby expatman » Wed Apr 08, 2020 7:25 pm

Thank you Trevor S. for your knoweldge of the subject material. I'm qoting the clause to my provider.
Stay safe.
Alan, Expatman.


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