Many of our clients’ trade services with the European Union and are accustomed to the process of submitting an EC Sales list and disclosing EC sales, both in Xero and on the VAT return. However, things have changed now we’ve left the EU. If you are unsure what Brexit means for your business, please read on.
Do I still need to submit an EC Sales List after 31st December 2020?
Yes, you’ll still be required to complete one final EC Sales list submission for transactions up to and including the 31st December 2020. This must be filed by the 21st of January 2021 to avoid penalties. After this, no further EC Sales lists will need to be filed.
How do I treat EC Sales moving forward?
You may be wondering how you prepare your invoices and what VAT rate to charge post-Brexit.
In most cases where a business sells to another business that is based outside of the UK, the sale should now be reported as Zero Rated for VAT purposes rather than Zero Rated EC Services.
Care needs to be taken though as it’s not always easy to work out where your client’s business is based. This is particularly the case if your client has an establishment in the UK as well as the overseas one you are engaged to work with.
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If you would like more information specific to your circumstances, please contact us for help in interpreting the rules.