VAT - provisions for business to consumer phone service | KPMG | UK
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Spring Budget 2017: VAT - use and enjoyment provisions for business to consumer mobile phone services

VAT - provisions for business to consumer phone service

Non-EU mobile phone charges paid by UK consumers will be subject to UK VAT from 1 August 2017.


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In a measure described as removing inconsistency between EU and non-EU charges, changes will be made to the UK use and enjoyment rules for business to consumer (B2C) supplies of mobile phone services. At present, a UK consumer is not charged UK VAT on the fees for using  their mobile phone outside the EU. From 1 August 2017 the UK law will change and these supplies will be subject to UK VAT, even though they are used and enjoyed (consumed) outside the EU. 

The use and enjoyment provisions are an option available to EU Member States to relieve from VAT supplies consumed outside the EU that would normally be subject to VAT in the Member State in question.  The UK had previously been considering applying the use and enjoyment provisions to advertising services. This would have brought advertising services supplied to non-EU recipients, but used and enjoyed in the UK, into the scope of UK VAT; but identifying where advertising is used and enjoyed is exceptionally difficult. Removing use and enjoyment from B2C mobile phone services is an easier way to raise additional revenue estimated to be around £65m per annum.     


Gary Harley

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