UK trades are being excluded from installing UK goods and services in Europe. Retail and leisure fitout, construction, exhibitions and art installations are particularly affected.
European businesses ordering services and goods from the UK are insisting on using local contractors for installations. The move is particularly acute in France, with shop and leisure fitouts, residential construction, exhibitions and arts installations all targets.
It is, says Ruth Corkin, an issue that has largely been hidden by Covid restrictions and one that is likely to gather pace across other European countries.
Ruth Corkin, our VAT and Indirect Tax Principal said: “UK businesses providing often technical or specialist services to EU customers are finding that their own installation contractors are being prevented from installing goods or services. This may be due to local laws appearing to require installation to be handled by resident nationals only, and possibly due to health and safety.”
We have seen examples of specialist shopfitters unable to install their own equipment and housebuilders wanting to include technology from the UK but not being allowed to use their own contractors to complete installations.
Ruth adds: “This does not appear to be EU wide but is common in France. It appears European domestic businesses are interpreting local legislation to the letter. We are beginning to see the same happen in other European countries as the Covid restrictions lift, and it does have significant implications for customers in Europe and for UK businesses.
“Furthermore, as the Covid restrictions lift and UK business begin to send their own staff to other countries to carry out work, it may create additional VAT problems. Warranties may be voided if equipment is not installed correctly, leaving UK businesses liable for claims for work in which they have not been involved. And then there are significant VAT headaches, with overseas domestic contractors billing UK suppliers with, for example, French VAT.”
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