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Business selling goods to business customers in the European Union will be aware of the requirement to supply a European Sales List (ESL) to HMRC with their vat returns, and to enter the value of goods supplied in box 8 of their VAT return.

Historically – and an often cause of confusion – this applied to goods, not services.

Services supplied to a EU Business Customer were outside of these requirements.

From 1 January 2010 however it requirement will apply to supplies of both goods and services where the VAT is reverse charged on the receipiant business – broadly any siutation where you zero rate supplies of goods or servies to a EU customer.

So services come under the regieme from 1 January.

Supplies outside of the EU, or supplies to a non business customer in the EU will not be affected, and neither will services that are deemed supplied where the supplier is based as these will carry standard UK vat.