Small businesses and limited companies registered for VAT are now required to file EC Sales list to HMRC if dealing with businesses outside UK. The requirement came into effect from 1 January 2010.
If your company provides services or supply goods to overseas customers including EU country, the following legislations apply to you:
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Your EU customers are now required to account for VAT under the reverse charge scheme. The new rule say the place of supply for cross border services is now be in the country of the customer.
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The time at which a customer accounts for VAT under the reverse charge scheme is also changing.
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There is a new requirement to file EC Sales Lists (ESLs) for supplies of services that are taxable in the customer’s country. There must be filed every calendar quarter, within 14 days for paper filing and 21 days for online.
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The same deadlines will apply to EC Sales Lists for goods. EC Sales Lists for goods must be filed monthly if the value of the goods exceeds £70,000 in the current or any of the previous four quarters. The £70,000 is exclusive of VAT.
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HMRC is introducing a new online service for reclaiming VAT incurred in other EU states instead of the current paper-based claims. You are advised to register your details and enrol for VAT online services at http://online.hmrc.gov.uk/registration.
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HMRC has published step by step guidance notes on cross border changes at www.hmrc.gov.uk/vat/cross-border-changes-2010.htm
In addition, HMRC also provide telephone support to small businesses with any query they may have about the cross border business matters.
HMRC Telephone Helpline: 0845 010 9000 (Monday to Friday 8am – 8pm, UK Time)
Professional Accountants Help
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