Is income from a retreat in EU subject to VAT?

[CaroleJ]

Hello, I'm considering holding my first retreat in Austria. My self-employed business turnover is currently below the UK VAT threshold. With the retreat, which I would like to hold a few times a year, the annual turnover (hopefully!) will exceed £85,000. My question is, with the supply being to non-buisness people and the accommodation, food, day-to-day expenses, etc being supplied in Austria, would my retreat turnover mean I would have to register for VAT or would it be exempt according to HMRC's "Place of Supply" rules, which I found confusing? Many thanks for any insight!

[Lambs]

C,

Assuming that the retreat can only be held on site - i.e., there's no remote/online provision - UK rules tie place of supply for VAT purposes (where physical location is intrinsic to that supply) very much to the locus of the supply. So, an hotel or similar will be wherever the hotel is situate.

See for example -

VAT Notice 741A Place of Supply / section 7.4 -

7.4 Examples of land related services
Examples of services that are land related include:
...
providing accommodation in hotels, holiday camps, camping sites or timeshare accommodation


Also HMRC's VAT Place of Supply Manual VATPOSS07600 - Land-related services: Examples of land-related services
...
provision of hotel or holiday accommodation


If in doubt, you can always ask HMRC. You will no doubt be aware that Austria is likely to want to VAT (equivalent) the supply, according to its own domestic regime.

Further complications may arise both for indirect and direct taxes (and, potentially social security obligations) depending on where your business is established. For example, you may start to spend more time in Austria, which may affect your self-employed status / tax position in the UK. Likewise, you could have a UK situs for your retreat business if it is run through a UK limited company, or by a company that may be registered overseas but is effectively controlled here, for instance because you still spend most of your time here and manage the business from the UK.

Just because something is taxable in the UK, does NOT mean it isn't taxable in Austria (or elsewhere, for that matter). You may have to consult the relevant Double Taxation Agreements to ascertain which territory has primacy or, where both states may tax, the route to secure relief from double taxation. I have typically found the European tax authorities to be excellent at advising incoming businesses - far superior to HMRC - with the only exception being Italy. However, taking advice from competent professionals who can deal in both jurisdictions (rare outside of, say, top 10 firms) or at least one and co-ordinate with each other, is strongly recommended.

Regards,

Lambs

[CaroleJ]

Thank you Lambs! One more question please. if it turns out I won't be subject to UK VAT for the retreat (although perhaps Austrian VAT), but it takes my UK self-employment turnover over the £85,000 threshold, would I have to become VAT registered in the UK all the same? Many thanks!