1 January 2010

1 January 2010 is an important date for those dealing with, or advising on, VAT


1. New place of supply rules change the place of supply of many cross-border supplies of services and, consequently, the VAT treatment.

2. EC Sales Lists for services to EU business customers are introduced. Previously, only suppliers of goods to EU customers were required to complete Sales Lists.

3. Improvements to system for reclaiming VAT on overseas expenses – a new electronic VAT refund procedure applies across the EU for all claims submitted after 1 January 2010 to replace the previous paper-based system. Businesses established in the UK must submit claims for VAT incurred in other EU countries on a standardised form through the UK Government Gateway, rather than direct to the Member State of refund.

4. The standard rate of VAT reverts to 17.5 per cent.



These are not the only changes to take place in 2010. From 1 April the way some businesses file their VAT returns and pay any VAT due will also change:

all VAT registered businesses with a turnover of £100,000 or more (excluding VAT) and all businesses newly registering for VAT, whatever their turnover, must file their VAT returns online and pay any VAT due electronically. This change will apply to all returns covering accounting periods beginning on or after 1 April 2010 and HMRC will no longer issue paper returns for these periods. Filing returns on paper will still be an option for the remaining VAT registered businesses, but this will be reviewed in the run up to 2012.