Trading with overseas businesses? Are you ready for the changes to the Cross-border VAT rules? 1 January 2010 is VAT day, VAT part 3
The third instalment of the Accountancy Services Direct VAT update sheets deals with overseas trading.
If you supply goods or services to overseas businesses, other EU countries or you reclaim VAT incurred in another EU country then you need to know about the changes to Cross-border trading VAT rules which take effect from 1 January 2010.
The main issues are as follows:
Place of supply rules for cross-border services to business customers will now be in the country of the customer. When these supplies are made within the EU then the customer will account for VT under the reverse charge mechanism;
The time at which the customer accounts for VAT under the reverse charge mechanism is also changing;
New requirements to file an EC Sales List (ECSL) for supplies of services that are taxable in the customers country. These must be filed every calendar quarter, within 14 days for paper returns and 21 days for online filing;
The same new deadline for ECSL’s will apply to goods supply also. Monthly ECSL’s need to be filed if the value of goods exceed £70,000 (excluding VAT) in the current or any of the previous 4 quarters;
New online service is to be introduced for reclaiming VAT incurred in other EU states to replace the current paper based claims system. You first need to register and enrol for online VAT services at http://online.hmrc.gov.uk/registration. At Accountancy Services Direct we recommend you doing this before 1 January 2010 so you can be ready for when the changes to take effect.
Should you need any further help or guidance with any of the VAT issues we have dealt with then please do not hesitate to contact us at Accountancy Services Direct.
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