Partner Article

VAT warnings from accountants

North East accountants are urging businesses to consider the implications of the new VAT package.

With effect from 1 January 2010 a number of changes are coming into force that will affect businesses that supply or receive services from other EU Member States, export goods to other EU Member States and incur VAT in other EU Member States.

The place of supply for cross-border services to business customers will now be (under the general rule) in the country of the customer as opposed to the country of the supplier.

This will impact of the VAT status of the supply and information that needs to be entered on the VAT return.

Robert Love, from Newcastle based accountants, RMT, said: “By preparing for the changes in advance, businesses will save themselves time and potential financial implications of not adapting to those changes from the outset.”

Currently, EC Sales lists are only completed for goods and not services and are prepared on a quarterly basis with a filing date 42 days after the quarter end.

Under the new rules, sales of services will also have to be included on the return and the filing deadline for paper returns reduces to 14 days.

In addition, if EC Sales in a calendar quarter exceed £70,000 then monthly returns will need to be completed.

A new online service will be introduced for reclaiming VAT incurred in other EU states instead of the current paper-based claims.

This was posted in Bdaily's Members' News section by Ruth Mitchell .