B2B sales of services to EU countries after 31 December

Sorry if this has already been covered but I can’t find any existing topics.

For invoices issued wef 1 January 2021, should I still be ticking the “apply VAT reverse charge” button? Also should the customer’s details still show VAT registered in another EC member state? If not, do I need to go through all customers and remove this tick box? If so, will it affect previous invoices?

Also, I assume that the EC sales list due 31 December should include all invoices up to that date even if unpaid. If they never get paid do I have to advise any adjustments?

Just to confirm, our sales are all services and B2B.

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Hi @Silverfrost

The following post may be of interest to you: VAT Updates - January 2021

Thank you @QFMathew . I did read that post but the section on services only refers to purchases of services, not sales.

For invoices issued before 1st January 2021 ticking the “apply reverse charge” button didn’t do the right thing for sales of services - the button was misleadingly labelled, what it actually did was treat the sale under the rules for EC dispatches of goods, putting the net value into box 8 on your VAT return and putting an entry on the ECSL with an indicator saying it was goods. B2B overseas sales of services should never have been included in box 8 in the first place, you should just zero rate the invoice and include a note on it somewhere that the customer is required to account for their own VAT using the reverse charge.

Prior to 1st Jan you would have needed to include these sales on your ECSL with a “services” indicator, but now you don’t need to do an ECSL at all (unless you’re in Northern Ireland).

Thanks @ian_roberts. I am aware of the “apply reverse charge” button not correctly working for the VAT return and I manually correct the VAT return each quarter to make it correct. The button did, however, show the No UK VAT - Reverse Charge Applicable message in red though and the customer’s EU VAT number shows through on the invoice. Do we still need to show these on the customers’ invoices or should we now be issuing invoices the same as to non EU customers - with no mention of VAT?

As I understand it you don’t have to include the customer’s VAT number but it would be good practice to do so anyway if you know it as a way to prove that you’ve checked the customer is definitely a business rather than a consumer, and thus that you’re allowed to zero-rate the invoice.

Thanks @ian_roberts so as we don’t sell any goods, presumably we can just leave everything as before.

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