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A new quarterly VAT return will need to be completed from 1 January 2010 by many UK firms that sell services to business customers in other EU countries.
The EC sales list (VAT101) has been in place for many years in relation to the sale of goods but will also apply in the new year to sales of services that are covered by the reverse charge.
The reverse charge principle means that the customer rather than supplier accounts for output tax on a supply.
HMRC have confirmed that a service business that needs to complete an EC sales list (ESL) can register in one of three ways:
- Register (via the HMRC website) to use the ESL service and submit the return online,
- Download a blank form from the HMRC website and submit a paper return, or
- Contact HMRC’s National Advice Service (NAS) contact number 0845 010 9000 who will post out a blank form
The return can be submitted in either paper format or online, an extra seven days will be given to those businesses that choose the online option.
Once a business has submitted an ESL to the Revenue, all future ESLs will be sent out automatically in the future.
However, it will still be possible to download versions of the ESL form, which will remain on the website as a replacement.
Independent VAT consultant Neil Warren commented: ‘An important priority is for a business selling services to avoid making entries in box 8 of their main VA returns. This box only applies to the sale of goods to other EU business customers, and is not relevant for services.'
