How to Record EU sales? Completing VAT Returns

How to Record EU sales? 

 

Selling goods outside of the UK

 

Goods sent to an EU country to a VAT registered customer:

 

• This type of sale is known as a dispatch
• Zero rates VAT
• State on the invoice the customer’s VAT number
• VAT return information: include the net value in box 6 and 8
• Include in an EC Sales List

 

Goods sent to an EU country to a non-VAT registered customer:

 

• Treat as UK sale with VAT as normal
• Do not include in an EC Sales List
Goods sent to a country outside of the EU (all types of the customer):
• This type of sale is known as an export
• Zero rates VAT
• VAT return: include the net value in box 6

 

Buying goods from a business outside of the UK

 

Goods received from an EU country (non-UK):
• This type of purchase is known as an acquisition or arrival
• Provide your supplier with your VAT number
• Your supplier should not charge their country’s VAT.
• Your supplier will record this sale on their EC sales list including your VAT number
• VAT return: include VAT in box 2 and 4
• VAT return: include the net value in box 6, 7 and 9

 

Goods received from outside EU:

 

• This type of sale is known as an import
• There will be no VAT on the purchase invoice
• UK VAT will be charged at the point of importation
• VAT return: include the VAT paid amount in box 4 if appropriate
• VAT return: include the net value in box 7

 

Selling services outside of the UK

 

Services in EU (non-UK):

 

• State on invoice “Reverse charge VAT applies to this transaction”
• VAT return: include the net value in box 6 (not box 8)
• May need to consider registering for VAT in a country which is the place of supply
• If the customer is VAT registered they have to account for reverse charge VAT in their country
• If the customer is VAT registered include sale on an EC Sales List.
Services outside EU:
• Outside the scope of UK VAT.
• VAT return: include the net value in box 6

 

Buying services from a business outside of the UK

 

Services in EU (non-UK):

 

• Provide your supplier with your VAT number
• Your supplier should not charge their country’s VAT.
• Your supplier will report the transaction on an EC Sales List including your VAT number
• You must account for reverse charge VAT in the UK
• How to do VAT return: include VAT in box 1 and 4
• VAT return: include the net value in box 6 and 7

 

Services outside EU:

 

• There will be no VAT on the sales invoice
• You must account for reverse charge VAT in the UK

• VAT return: include VAT in box 1 and 4
• VAT return: include the net value in box 6 and 7

Let our accountants in London make things easier to understand for you. We’re friendly, proactive, young and keep up with all the latest developments in your business to make sure you’re on top of your game.

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