Portal Business Centres VAT news
Portal Business Centres are keen to provide support to all businesses, as there have been some major changes to VAT, not just the change in rate please read below to ensure all businesses are prepared.
Changes to VAT from 1 January 2010
On 1 January 2010 the standard rate of VAT Returns to 17.5 per cent.
There will also be major changes to the VAT rules for businesses who:
- supply services to or receive services from overseas businesses
- supply goods to other EC countries
- reclaim VAT incurred in another EC country
- changes affect where, how and when VAT is accounted for.
Place of supply of services
The place of supply of services rules are changing. In particular the general rule for business-to-business transactions will be that VAT needs to be accounted for where the customer is located. The general rule for business-to-customer transactions will remain that VAT is accounted for where the supplier is established. As now, there will be some exceptions to the general rules.
EC Sales List (ESL) for services
UK VAT registered businesses that supply services to VAT registered businesses in other EU countries, where the place of supply is the customer’s country, will have to complete ESL’s for each calendar quarter and submit these within 14 days for paper returns and 21 days for electronic returns.
This means you will need to start collecting your customers’ VAT Registration Numbers now.
EC Sales Lists for goods
UK VAT registered businesses that supply goods to other VAT registered businesses in other EU countries already submit ESL’s. From 1 January 2010 new rules will:
- reduce the time available to submit ESL’s in line with the limits above
- as an anti-fraud measure, require the monthly submission of ESL’s where the value of the supplies of intra-Community goods (excluding VAT) exceeds £70,000 in the current quarter, or any of the previous four quarters. This threshold will be reduced to £35,000 (excluding VAT) with effect from 1 January 2012.
VAT refunds
A new electronic system is being introduced – for businesses that reclaim VAT incurred in another EU country – which means that you will have to submit your claim electronically through the Government Gateway from 1 January 2010.
