EC sales

note : About this information

The information below is not an in-depth guide to EC trade. For more information, please refer to ‘VAT Notice 725 The Single Market’, available from your local VAT Business Advice Centre, or consult your accountant.

If your business is a UK VAT-registered company selling goods or services to anyone in another EC member state, you will normally charge VAT at a zero rate on the transaction if the sale is in line with intra-EC sales rules. These rules require that customers supply you with their VAT registration number.

This does not mean that the VAT on the transaction is ignored; it is accounted for in the VAT Return and EC Sales reports. EC customers also account for the VAT that would have been paid in adherence to the EC rules and legislation applicable in their state.

Before you can track sales made to EC customers, you need to set up a VAT code to assign to EC sales. No VAT amount will be tracked on the sale. The VAT rate and EC reported rate are set to zero per cent, as you are not collecting VAT on the sale.

This code should only be used when making a sale that conforms to HM Revenue & Customs rules governing intra-EC sales.

If you sell items to EC customers, you also need to set up your customer cards to report these sales in the EC Sales report.

To create a VAT code for EC sales

1	Go to the Lists menu and choose VAT Codes. A list of VAT codes appears.

2	Click New. The VAT Code Information window appears.

3	In the VAT Code field, type a code for the EC VAT sales (for example, ECS) and press Tab.

4	In the Description field, type a VAT code description such as EC Sales VAT Code.

5	In the VAT Type field, select VAT - EC Sales. The VAT Rate and EC Reported Rate fields are set to zero per cent.

6	Select the linked accounts for VAT collected and paid.

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Click OK.

To set up customer cards for EC sales

1	In the Card File command centre, click Cards List. The Cards List window appears.

2	Locate an EC customer’s cards and click Edit. The Card Information window appears.

3	If you sell items to this customer, select the EC Customer option.

note : Service sales

If you only supply the customer with services, do not select them as an EC customer. Service-only sales should not appear on the EC Sales report.

4	Click the Selling Details tab.

5	Type the customer’s EC VAT registration number in the VAT ID Number field. This number appears on the EC Sales report.

6	In the VAT Code field, select your EC Sales VAT code.

7	Select the Use Customer’s VAT Code option.

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Click OK.

9	Repeat from step 2 for other EC customers.

Reporting carriage cost for sales to EC customers

If you need to include carriage costs for sales to EC customers in the EC Sales report, you need to add the carriage cost as a line item on the invoice. Do not enter them in the Carriage field. Entries in the Carriage field do not appear on the EC Sales report.

Related Topics

■	Reporting EC sales

■	EC purchases