There are some important changes that come into effect in 2010. The changes most likely to affect you are:
The standard rate of VAT increases to 17.5% on 1 January 2010.
HMRC has announced that they are to phase out paper VAT returns. From 1 April 2010, the only businesses permitted to continue using paper returns will be those with a turnover of no more than £100,000 net of VAT. All larger or newly registered businesses will, from that date, be forced to submit electronically.
If you or your company sells goods or services to other EU member states there will be changes to how you account for VAT.
a) Currently the basic rule (now to be called the general rule) is that VAT is due where the supplier belongs. From 1 January 2010 the general rule will be that VAT is due where the customer belongs for business to business supplies. For business to consumer supplies, VAT will continue to be due where the supplier belongs.
b) EC Sales Lists for Services
If you supply services to businesses in other EU countries and the place of supply of those services is the customer?s country (with the consequence that the customer must account for a reverse charge) then with effect from 1 January 2010 you must now complete an EC Sales list for those services.
The form that is currently used for the supply of goods to other EU Member States will still be used but marking the indicator box with code 3 for services.
c) Monthly EC Sales lists for Goods
Additionally, there will be new requirements for the submission of monthly EC Sales Lists for goods by businesses where EC sales in a calendar quarter exceed £70,000 (£35,000 from 2012).
d) New deadlines for submission of EC Sales Lists
The timescale for the submission of EC Sales Lists for goods (and now services) will be reduced from 42 days to 14 days for paper forms and 21 for electronic submission. Penalties for late submission, calculated at £5, £10 or £15 per day, depending how many times you have been late, will be imposed.
We occasionally write about recent events and legislation, expressing our opinion and keeping you informed. New articles will be published here, so check back regularly.
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