VAT and Cross Border Services - New Rules

If you supply cross border services, then you may need to seek help from a specialist to ensure that you understand the new rules relating to VAT.

Prior to January 1st, the basic rule was that VAT was payable where suppliers were established. Now, the basic rule is that the opposite will apply, and VAT will be payable by the customer where it is established - unless, that is, services relate to:

• land or property;
• intermediary services;
• transport;
• restaurant and catering services, or
• performance services

each one of which is now subject to specific VAT regulations.

If your Company supplies any of those services, then you really should take specialist advice, because - as usual! - any failure to apply or adhere to the rules correctly is likely to cost you money. And even if you don't supply any of those services - or believe that the services you supply do not fall within those categories - then it would still be good idea to seek advice to make sure that you understand everything that you will now need to do.

If, for example, you supply cross-border services to any EU member State where VAT is payable by the customer rather than your Company, then your Company will have to submit monthly or quaterly EC Sales Lists detailing those services despite the fact that you will not have to account for VAT. You can do this on on-line at H M Revenue & Customs , where you will also be able to find an explanation of the new rules in pdf form.