Oil & Gas - Services: Case Study 5

Background

We were engaged by an oil and gas services company to assist with a dispute with one of their main customers. The client’s customer was refusing to pay the sales invoices whilst the VAT treatment was in dispute. This is a common issue for our clients as HMRC are regularly disallowing input tax charged by suppliers in error following incorrect application of the place of supply rules.

Our Approach

  • Developed an interactive VAT Place of Supply tool that walks clients through the complex rules
  • This can be used both down the supply chain - to ensure that suppliers are correctly applying the VAT rules – or up the supply chain – to ensure that our clients apply the correct VAT treatment to suppliers to customers
  • Where the incorrect treatment had been applied, we provided a draft letter that could be sent to the supplier/customer outlining the relevant legislation and the appropriate treatment
  • Our review also highlighted a significant amount of foreign VAT which had not been recovered. We submitted claims to the relevant jurisdictions to recover the VAT incurred

The Benefits to the Client

  • The Place of Supply tool provided an audit trail of the decision making process which provided the central tax team with peace of mind around the process
  • The provision of the tool meant that as well as assisting now, we support our client’s VAT processes going forward
  • The letters setting out the relevant treatment saved our client time as they no longer had to repeatedly chase the unpaid invoices or deal with disputes
  • The review helped them make money by identifying additional VAT recoveries and VAT that had been incorrectly charged that could potentially have been disallowed by HMRC

The Plus Factor in Action

  • We helped our client make money by identifying additional VAT recoveries and VAT that had been incorrectly charged that could potentially have been disallowed by HMRC
  • We saved our client time by providing letters setting out the relevant treatment meaning they no longer had to repeatedly chase the unpaid invoices or deal with disputes
  • We gave our client peace of mind by providing an audit trail of the decision making process
  • We supported them now and in the future by providing assistance now as well as supporting our client’s VAT processes going forward
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Key Contact

John Black
Partner

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+44 1224 625111

Our Plus Factor

Our Plus Factor

Our Global Reach

Our Global Reach