VATPOSS15100 - Use and enjoyment: Introduction

The use and enjoyment rules apply to telecommunications services and broadcasting services (B2B and B2C); electronically supplied services (B2B); hired goods; hired means of transport and insurance repair services(B2B).

Effective use and enjoyment takes place where a recipient actually consumes services irrespective of the contractual arrangements, payment or beneficial interest. This additional provision corrects instances of distortion which remain as a result of considering only where the provider and the customer belong. It would be distortive, for example for supplies such as telecommunications services, that are actually consumed outside the UK, to be subject to UK VAT. Equally, it would be distortive for there to be no UKVAT on such services where they are consumed in this country.

Effective use and enjoyment is only a consideration when certain services made by a UK provider are consumed outside the UK or those services when supplied by a non-UK provider are consumed in the UK.

For example, the place of supply of telecommunications services is where they are used and enjoyed when supplied

• by a UK provider to a UK customer or a non-business customer in a non-UK country, to the extent that effective use and enjoyment takes place outside the UK (such element being outside the scope of VAT), or

• by a non-UK provider to a UK customer or a non-business customer in another country, to the extent that effective use and enjoyment takes place in the UK (such element being subject to UK VAT).