Introduction to EC Sales
What is the EC Sales List?
Sales of goods and services to EC (European Commission) businesses tend to be zero rated for the purposes of VAT. The EC Sales List is a quarterly report of these sales to HMRC.
The EC Sales List does not generate a tax bill, it is purely for reporting and statistical purposes.
Finer details of the EC Sales List
- The EC Sales List contains information on sales of goods and services to VAT registered businesses in other EC countries.
- EC Sales are only relevant for B2B (Business to Business) sales, not B2C (Business to Consumer) sales, which would fall under the VAT MOSS rules.
- Purchases of services from the EU are zero rated for the purposes of VAT. This means that you should not pay VAT to EU suppliers, such as Microsoft, Google, Amazon, Dropbox, Facebook etc. as all of these companies operate from an EU base. In order to achieve this you should enter your VAT number into the customer account settings for each of these suppliers. To check that this has worked you should see the VAT rate at 0% on each of their invoices once your VAT details are entered into their system.
What does the EC Sales list look like?
A typical EC Sales List return looks like this:
- Your customer's country code, which can be found here.
- Your EU customer's VAT number.
- Value of the good and services you have supplied.
In the above example the UK business has made sales of services amounting to £229,878 to two businesses based in Ireland.
Checking EU VAT numbers
You should check that your customer’s VAT registration number is valid and that they are actually based in the EU. You’ll need to do this for each new customer.
You can verify this by going to the European Commission VIES VAT number validation page here.
What are the deadlines for filing with HMRC?
EC Sales list returns are always filed by reference to a calendar quarter. The deadlines are as follows:
- 1 January to 31 March - Due by 21 April
- 1 April to 30 June - Due by 21 July
- 1 July to 30 September - Due by 21 October
- 1 October to 31 December - Due by 21 January
Is there a threshold for the EC Sales List?
There is no threshold to register for EC Sales List if you are a UK based business providing goods or services to an EU business. However, if you sell goods to the EC to the value of £35,000 or more per quarter you may have to file monthly EC Sales Lists.
You may be able to file simplified annual EC Sales Lists if:
- the value of your total taxable turnover in a year is not more than the VAT registration threshold plus £25,500
- your supplies to customers in EU countries are not more than £11,000 a year
What will happen post Brexit?
In the event that the UK leaves the EU without a deal, you will not be required to complete a EC Sales List.