VAT Updates - January 2021

Hi Glenn, thanks for this. I can’t see the additional VAT options when creating a new invoice though. Where are they please? It still says "Apply VAT
Reverse Charge2 with a tick-box but that’s all. Do I have to choose a different sale category? There doesn’t seem to be a suitable “services” option and I normally use software sales.

Hi @Pelican10,

If you scroll down to the bottom of the screen when you are in the invoice there should be options at the bottom:

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Hope this helps :slight_smile:

Thanks, but this is all I get:
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Thanks Glen & Co. Maybe need to adjust working on Edit client page.

“VAT Registered in another EC Member State” > “VAT Registered in a EC Member State”

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Can you add “out of Scope of UK VAT” to the edit company VAT options?

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Also like Pelican10 I don’t have the full range of options per your post

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In general there is no specific treatment now for EC sales vs sales to the rest of the world. Where applicable (depending on the place of supply rules) sales invoices to EC based customers should instead be zero rated. The client level EC flags will be removed in April, but remain for the time while invoices are still being input for the period before 1st January.

We will be releasing a bulk update tool to remove all EC flags in the coming days. We will also be extending the bank tagging section to allow these new VAT provisions to be applied there too. Further updates will follow.

Hi, I have removed the EC flag from my EU suppliers of goods and ticked No Special VAT treatment. What settings do I need now on the supplier page for suppliers of services which are subject to reverse charge (Amazon fees etc)?

when you create the invoice there are options at the bottom of the invoice:

You will need to tick this box :slight_smile:

Thank you :slight_smile:

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Hi, I’m still not seeing this “reverse charge on services” option. What do I need to do to see this please?

Hi @Pelican10,

It should be at the bottom of a purchase invoice

I’m on the sales invoice - should there be one on there? I need it for that. Thanks.

Hi @Pelican10,

No there is no need for it to be on the sales invoice please see Glenns response above:

Thanks. I thought services were still reverse-charged? Did I misunderstand?

If you refer to section 5 of the the Place of Supply Rules guide, they set out the criteria for applying the reverse charge. This refers only to the supply of services, where you are the customer.

https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a

For the supplies you make to EC based customers you would typically zero rate those invoices. It differs depending on whether it’s B2B or B2C so it’s worth reviewing the guidance here to determine which VAT provision to apply.

Many thanks. It’s B2B, so I’ll have a look.

The reverse charge is something that the purchaser does, not the seller. If you’re selling services where the “place of supply” is outside the UK then you zero-rate your sales invoice and add a note on the invoice telling the purchaser that they should apply the reverse charge in their own country. This is the same procedure as it was before the end of the Brexit transition, the only difference now is that you no longer have to submit an EC Sales List for cases where the purchaser is in the EU.

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Ah, OK, thanks! I have probably been doing it wrong for years then…! Previously on QF we had an “EU VAT Exemption” section which I guess I was viewing as a “reverse charge”. Thanks for the clarification!

The “EU VAT Exemption” marker was to treat the invoice as a supply of goods (not services) to an EU customer, putting the net value in box 8 on your VAT return as well as box 6 - selling services the net was only supposed to go in box 6, not 8.

So does that mean I should never have filled in an ECSL if I had nothing in box 8? I always filled that in as “services” when I did the ECSL.