1 January 2010 was a key date for businesses with EU activities. An EC Sales List (ESL) must now be completed if you are VAT registered in the UK and sell services to an EU business customer without charging VAT. Another important change is that any claim for a refund of VAT paid in another EU country is dealt with by a modern electronic claims system.

EC sales lists
The ESL needs to be submitted on a quarterly basis. If you submit the return online you get an extra seven days to file it, so it is due within 21 days of the end of the quarter – which is 21 April 2010 for the March 2010 return.

The details that have to be given on the return are very simple: they are the value of sales to each customer for the period covered by the return, their VAT registration number , and their country code.  A code 3 entry confirms that a sale relates to services, not goods.

You must contact HM Revenue & Customs (HMRC) if you need to complete an ESL – it is not up to them to contact you.

EU VAT refunds
A UK VAT registered business is entitled to reclaim much of the VAT it pays in other EU countries. So if you pay VAT on exhibition space you hire in France, you can normally reclaim this VAT from the French tax authorities.

The new system from 1 January 2010 is based on electronic procedures:

• An electronic claim is submitted in the country where you are
  VAT registered, so for a UK company that is submitted to HMRC.
  
• HMRC will then forward the claim (also by electronic means) to
  the country where the VAT was paid. The tax authority in that
  country then has four months to process it and a further ten days
  to make a repayment
• The return is mainly based on numbers, so language issues are no
  longer a major problem.
  

Before submitting a claim, it is important to check that the country in question does not have any block on claiming for certain categories of expenditure. For example, many countries do not allow claims to be made for travel or hotel related costs