HomeInsightsTechnical updatesVAT and invoicing EU customers

Insights

Technical updates // 18/05/2015

VAT and invoicing EU customers

Since the rules on charging and reporting VAT changed in 2010, HMRC has taken a lenient approach to errors in EC Sales Lists. But there are signs that it is now toughening its stance.

When you send an invoice without VAT to a customer in another EU territory, you have to display the customer’s EU VAT number and report the transaction on an EC Sales List. It is all too easy to obtain their VAT number, set up the customer account and use that number for all future invoices.

However if the VAT number is no longer valid, you should not zero-rate your sale of goods to that customer.

HMRC has been checking customer VAT numbers for the sale of goods to customers in other EU countries. It is looking at zero-rated cross-border sales and is raising VAT assessments if the numbers are no longer valid. It is also asking for evidence that goods have been sent out of the UK.

So far it has only focused on goods, but we are expecting a similar change with regard to the supply of services.

Regardless of whether you supply goods or services in the EU, as an absolute minimum you should check your customers’ VAT numbers at least once a year. For high-value sales, a more frequent check is required. In addition, retain evidence so that you can demonstrate to an inspector that you have taken reasonable steps to ensure that numbers are valid.

Checking VAT numbers is a simple process. The Europa website allows you to verify customer VAT numbers .

Print Friendly, PDF & Email


RELATED CONTENT
  • Revised FRS 102 Reduces Intangible Asset Recognition Requirements

    FRS 102 Revisions Revisions to FRS 102 arising from within the Financial Reporting Exposure Draft 67 (“FRED 67”) will see acquiring companies in business combinations being given the option to recognise fewer intangible assets than they had been required to previously. These revisions are being implemented by the Financial Reporting Council (“FRC”) in response to […]

    Print Friendly, PDF & Email
    READ MORE >
  • FRS-102 Technical Update – February 2018

    In March 2017 the FRC published FRED 67 which contained amendments to FRS 102. These were finalised on the 14 December 2017 and can now be early adopted. If a company chooses to early apply FRED 67 all amendments must be adopted. The effective date is for periods beginning on or after 1 January 2019. […]

    Print Friendly, PDF & Email
    READ MORE >
  • Introduction to IFRS 16 – Leases

    For accounting periods beginning on or after 1 January 2019 there is a new treatment of leases which you may need to be aware of. IFRS 16 removes the difference between operating and finance leases for accounting purposes, and as such they are all treated as if they are finance leases by recognising the asset […]

    Print Friendly, PDF & Email
    READ MORE >