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.
You did need to do the ECSL up until 31st December, you just shouldn’t put anything in box 8 for services - QuickFile has never really supported EC sales or purchases of services properly until now, you’ve always needed to either do manual adjustments to box 8 or file your ECSL directly with HMRC rather than through QuickFile. It’s never had a way to put invoices into the ECSL but not into box 8.
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Hi Ian. I’m also selling B2B services to the a client in the EU and have a couple questions as you seem to be an expert on this topic 
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When setting up the client in QF - do I need to tick any of the boxes under the VAT settings? (curretnly I have ‘No special VAT treatment’ selected)
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When creating the sales invoice for the same client - if my understanding is correct, I should NOT select any of the options there (i.e. ‘VAT Exempt’ or ‘Out of Scope for UK VAT’), instead I should set the VAT manually to 0%
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The comment I’ve been advised to include on the sales invoice is: “VAT reverse charge mechanism applicable based on article 196 Directive 2006/112/EG” - do you think this would be sufficient?
In terms of the software:
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No this was only needed for invoices before 1st January. Checking the “VAT Registered in EC Member State” on the client settings exposed the EC VAT Reverse Charge checkbox option in the top right of the invoice editor, you no longer need to use that box for invoices issued from 1st January.
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Yes that’s correct, you would set the VAT to zero in the itemised section if the sale meets the requirement to be zero rated. You can refer to the HMRC Place of Supply rules to determine if the sale qualifies to be zero rated.
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This is quoting an EU directive which is no longer needed. For B2B services you’d need to evidence that you’re dealing with a business customer, you can do this by requesting and checking their VAT number.
Supplies of services where the “place of supply” is not the UK are technically considered “outside the scope of UK VAT”, but you’re still supposed to include the net value in box 6 on your VAT return. @Glenn can confirm for definite but I believe that ticking the “out of scope” box in QuickFile will exclude the invoice from box 6, therefore the correct course of action in this case would be just to treat it as zero rated by selecting “no VAT”.
Basically what you’re doing with this statement is reminding the customer that they’re responsible for accounting for any taxes under the rules applicable in their country, and if they’re in the EU then that directive is still the rule that applies to them (even though it no longer applies to us in the UK) so it doesn’t seem unreasonable to me. Your responsibility as the seller under UK law is just to satisfy yourself that you’re definitely dealing with a business customer rather than a consumer, to justify zero-rating the invoice based on the place of supply rules.
I still need to chose one of the options on the Client Details page.
If “No special VAT treatment” shouldn’t be used anymore and “VAT Registered in EC Member State” shouldn’t be used for invoices issued from 1st of Jan 2021, then it only leaves me with the option of “Exempt or out of scope for VAT purpose” - so this seems to be the right option (by process of elimination 
)
Sorry typo 
“No special VAT treatment” is correct.
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Thanks!
As for the invoice (question #2), after confirming that the sale meets the requirements to be zero rated (thank you for the link to the HMRC website!) I will choose the ‘No VAT’ option whcih would result in 0% VAT.
Perosnally I find it a bit confusing that the options are 20%, 5% and No VAT, as opposed to: 20%, 5%, 0%
I agree that would be clearer. We’ll update that.
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This input was also very useful and I could successfully verify the customer’s VAT number using the website.
Do I need to mention the customer’s VAT number on my sales invoice to evidence that I’m dealing with a business customer?
I don’t believe it’s a requirement, but it is good practice and some of your EU clients may request this. We will shortly be updating the available labels on the invoice template so that if a client VAT number is recorded it will automatically be displayed on the invoice.
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Hey all, I updated my client settings to switch from “VAT Registered in EC Member State” to “No special VAT treatment” as suggested here but this affect all previous invoices
Should I create a “virtual” new client to deal with that ?
Hi @wighawag
It will only affect invoices that have not been attached to a previous VAT return. If you have a period that staggers the 1st Jan you can leave the option enabled for now if you prefer. It won’t prevent you from applying the new reverse charge services VAT option on the invoice editor. When you revert to “no special treatment” on the client settings all it does is hide the EC Flag option on the invoice editor.
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Ok, I see, this will be my first ever VAT return.
You mean I could leave the client setting as “VAT Registered in EC Member State” and then disable the reverse charge option in the invoice ?
On that note, when I created the previous invoice (issued on 14 jannuary) I did not get the warning so I created it with reverse charge enabled.
I guess I should not modify it but how would this affect my VAT return ?
Thanks
Yes that’s right, all the client setting does is show the EC option in the top right of the invoice editor. From 1st Jan if a sale to an EU based customer qualifies for zero rating, you can just set the VAT rate to zero on your invoice, no additional options need to be checked.
Prior to Jan 1st you can check the EC option in the top right. Once you’ve filed all your VAT periods that cover pre 1st Jan in the main client list there’s an option to bulk remove EC flags for all customers.
By April the EC Flag option and the client specific setting “VAT Registered in EC Member State” will be completely removed from the software.
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A post was split to a new topic: Reverse charge with flat rate
ANY help - I cant get the reverse charge option come up
how can i do this please any step by step guide to enable this
@goultygang are you referring to your sales invoices? There is no reverse charge mechanism for EC sales now. I’ve made the following edit to the announcement to clarify on this point.
In the case where you are supplying services to businesses based in an EC member state and where the place of supply rules permit, from 1st January you can apply the zero rate of VAT and no further VAT options need to be selected on your invoices.
Hey all, I have been reading more about VAT and EU customer, in particular this article : Do I charge VAT when selling services to overseas client? | Chris Maslin's blog
While this thread recommend to use zero VAT, this article instead suggest to use “out of scope of VAT”
Any idea ?
Your refering to services being provided that are outside the scope of vat. Which would be correct to mark those services as out of scope.
But I do not believe this thread refers to the same thing you are.