Meg is an unincorporated sole trader. She requires advice on the value added tax (VAT) implications of purchasing supplies from an overseas supplier.

MT Travel – VAT:
– MT Travel is registered for the purposes of VAT.
– MT Travel currently buys standard-rated marketing services from a UK supplier, who is VAT registered.
– MT Travel can buy the same services from a supplier located in an overseas country, which is not in the EU, where the rate of VAT is 12%.

Required:
(c) Explain the value added tax (VAT) effect of MT Travel purchasing the services from the overseas supplier, rather than the UK supplier. (4 marks)