Commentary

V7.271 Other issues relating to place of supply

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.271 Other issues relating to place of supply

Part V7 Tax planning | Commentary

V7.271 Other issues relating to place of supply

EU sales list

An important change introduced on 1 January 2010 means that a UK business selling services to an EU business customer where the customer must account for the reverse charge must record details of all such transaction on an EU Sales List (ESL). The ESL is relevant to all services where the EU customer declares the reverse charge, not just the new situations that apply after 1 January 2010.

The ESL (VAT101) has been in place for many years and has been completed by UK businesses who sell goods to VAT registered businesses in other EU countries. The only difference for a supply of services is that a 'code 3' entry will need to be made in the end column of the form.

The aim of the ESL is to enable the tax authorities to ensure that reverse charge entries are correctly being made by those businesses that are receiving services without being charged VAT. This is particularly relevant if the business in question is partly exempt and cannot fully reclaim input tax.

The key rules for ESL forms are as follows:

  1.  

    •     The forms must be completed on a calendar quarter basis, either in paper format or online. An extra seven days (21 instead of 14) are given if the form is completed online.

  2.  

    •     It is possible that some supplies will be made to business customers in other EU countries who are not VAT registered. These sales will not be recorded

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