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VAT place of supply changes 1 January 2010

Tax Alert November 2009

If you supply goods or services, business to business, to customers located outside the UK you may need to change the way you account for VAT on the supply from 1 January 2010.

Unless the supply falls into one of the three categories mentioned at the end of this paragraph, the default position for business to business supplies from 1 January 2010 is as follows - the place of supply will change from the location of the supplier to the location of the customer.

This default position does not apply where the place of supply is already based on:

  • the location of the customer (commonly known as ‘Schedule 5’ services such as accountancy);
  • the place where the service is being performed (e.g. training services),
  • in the case of building related services (e.g. services of a plumber or architect), the location of land.

If this change means that you are no longer charging VAT to European Community businesses from 1 January 2010 you will need to make appropriate entries on the quarterly EC Sales List form.

The full scope of the changes enacted are beyond the scope of this short alert. If you trade with overseas businesses please call so we can fully brief you based on your particular circumstances.

Hilton Sharp & Clarke