VAT on overseas supplies

From 1 January 2010 new laws will come into force for the supply and receipt of overseas services between UK VAT registered businesses and individuals and businesses in other EU member states.

• if you are selling services to a private individual you should charge UK VAT on your invoice
• if you are selling services to a VAT registered business you should not charge UK VAT on your invoice
• If you are receive a service from a business registered for VAT in another EU member state you need to operate the Reverse Charge mechanism.  The Reverse Charge mechanism is where you pretend that you sold yourself the service meaning that you make the relevant entries in boxes 2 and 4 of your VAT return.

Also from 1 January 2010 businesses selling services will need to complete an EC sales list.  This is a declaration that lists supplies of services made by a UK VAT registered business to a VAT registered customer in another member state.  You will have only 14 days from the end of the relevant period to submit this form.  Businesses selling goods already have to complete these EC sales lists.

Follow this link for further information on these (and other) cross border VAT changes.