Whether a service is “related to land” is important because there are distinct rules for this type of supply compared to the General Rule. The place of supply (POS) of land related services is where the land is located, regardless of where the supplier or recipient belong.

The rule applies only to services which relate directly to a specific site of land. This means a service where the land is a central and essential part of the service or where the service is intended to legally or physically alter a property.

It does not apply if a supply of services has only an indirect connection with land, or if the land related service is only an incidental component of a more comprehensive supply of services.

What is land?

For the purpose of determining the POS, land (also called immoveable property in legislation) means:

• a specific part of the earth, on, above or below its surface
• a building or structure fixed to, or in, the ground above or below sea level which cannot be easily dismantled or moved
• an item making up part of a building without which it is incomplete (such as doors, windows, roofs, staircases and lifts)
• items of equipment or machinery permanently installed in a building which cannot be moved without destroying or altering the building

What services directly relate to land?

HMRC provide the following examples:

• construction or demolition of a building or permanent structure
• surveying and assessing property
• valuing property
• providing accommodation in hotels, holiday camps, camping sites or timeshare accommodation
• maintenance, renovation and repair of a building
• property management services carried out on behalf of the owner
• arranging the sale or lease of land or property
• drawing up of plans for a building or part of a building designated for a particular site
• services relating to the obtaining of planning consent for a specific site
• on-site security services
• agricultural work on land
• installation and assembly of machines which, when installed, will form a fixture of the property that cannot be easily dismantled or moved
• the granting of rights to use all or part of a property (such as fishing or hunting rights and access to airport lounges)
• legal services such as conveyancing and drawing up of contracts of sale or leases, including title searches and other due diligence on a specific property
• bridge or tunnel toll fees
• the supply of space for the use of advertising billboards
• the supply of plant and equipment together with an operator
• the supply of specific stand space at an exhibition or fair without any related services

What services are only indirectly related to land?

The following HMRC examples are not deemed to be land related services:

• management of a property investment portfolio
• drawing up of plans for a building that do not relate to a particular site
• arranging the supply of hotel accommodation or similar services
• installation, assembly, repair or maintenance of machines or equipment which are not, and do not become, part of the building
• accountancy or tax advice, even when that relates to tax on rental income
• the supply of storage of goods in property without a right to a specific area for the exclusive use of the customer
• advertising services including those that involve the use of a billboard
• marketing, photography and public relations
• the supply of equipment with an operator, where it can be shown that the supplier has no responsibility for the performance of the work
• general legal advice on contractual terms
• legal services connected with fund raising for property acquisitions or in connection with the sale of shares in a company or units in a unit trust which owns land
• stand space at an exhibition or conference when supplied as part of a package with related services, eg; design, security, power, telecommunications, etc.

These examples are mainly derived from case law and the department’s understanding of the legislation and they are not exhaustive.

The Reverse Charge

If an overseas supplier provides land related services in GB, the POS is GB and the reverse charge applies if the recipient is GB VAT registered.

If a GB supplier provides services directly related to land where the land is located outside GB, the POS is not GB. This means that there is a supply in another country. VAT rules in different countries vary (even across the EU) – some countries use the reverse charge mechanism, but others require the GB supplier to VAT register in the country of the POS (where the land is physically located).