Place of supply of services ― hiring goods and means of transport

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Place of supply of services ― hiring goods and means of transport
  • What is the place of supply when hiring goods (other than means of transport)?
  • How do the use and enjoyment provisions apply to the hiring of goods?
  • How might use and enjoyment apply in practice?
  • What if the hired goods are only partially used and enjoyed outside / in the UK?
  • What is the place of supply of the hire of a means of transport?
  • What is a means of transport?
  • What is short-term hire and what is long-term hire of a means of transport?
  • What is the place of supply of a short-term hire of a means of transport?
  • What is the place of supply of a long-term hire of a means of transport?
  • More...

Place of supply of services ― hiring goods and means of transport

This guidancenote looks at the special place of supply of services rules that apply to the hiring of goods and ‘means of transport’ for VAT purposes.

For an overview of VAT and international services more broadly, see the International services ― overview guidancenote.

For in-depth commentary on the legislation and case law, see De Voil Indirect Tax Service V3.188.

What is the place of supply when hiring goods (other than means of transport)?

The starting point for determining the place of supply for the lease / hire of goods (other than means of transport) depends on whether the transaction is B2B or B2C.

For B2B supplies, the place of supply of services should be determined under the general rule. The place of supply is therefore where the customer belongs.

For B2C supplies, the place of supply is determined under the general rule unless the customer belongs outside the UK and the Isle of Man. If the customer belongs outside the UK and the Isle of Man, then the place of supply is where the customer belongs.

However, both B2B and B2C supplies are also subject to ‘use and enjoyment’ provisions as described below. These provisions can change the place of supply determined under the rules set out above.

For the general rule, the distinction between B2B and B2C supplies and the concept of belonging, see the Place of supply of services ― the general rule, relevant business persons and belonging guidancenote.

For an interactive guide to the place of supply of the hiring of goods other than means of transport, see our interactive flowchart.

How do the use and enjoyment provisions apply to the hiring of goods?

In the context of the hiring of goods, the use and enjoyment provisions dictate that if the place of supply would otherwise be the UK, but the goods are used and enjoyed (ie physically used) outside the UK, then

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