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Place of supply for insurance repair services

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The VAT (Place of Supply of Services: Exceptions Relating to Supplies Made to Relevant Business Person) Order, SI 2016/726, changes the place of supply rules for ‘indemnity repairs’ to moveable goods, such as cars and mobile phones, carried out under insurance contracts, with effect from 1 October 2016, to counter avoidance involving the provision of repair services to insurers located outside the EU. The order introduces an exception to the usual place of supply rules, which treat supplies as taking place where they are effectively used and enjoyed, rather than where the recipient is located. UK repairers will have to charge VAT at the standard rate, irrespective of where the provider of the insurance cover for the goods is located. HMRC consulted on a draft version during January/February 2016.

Issue: 1317
Categories: News , VAT