Monday, 7 December 2009

New European VAT Rules

One of the challenges for the SOLO IP practitioner based in the United Kingdom is dealing with your VAT returns. As from 1 January 2010 we have to change the rate of VAT on our bills from 15 back to 17.5%. However that is not all that affects us. IP is a global business so hopefully you have a few non-UK based clients. Since the provision of patent and trademark services is a "service" not a "good", it used to be pretty simple. No VAT for overseas clients and you could forget that strange thing an EC Sales List (ESL). No longer. Within 14 days of your next VAT reporting period HMRC want an ESL from you.

Here is the official Notice. For practical purposes this means you need to record the value of services supplied to EU clients but you still do not charge them VAT. You do need to included their VAT number on your invoices and on the ESL. Most of us have that data already. However I have noticed a few of my European suppliers have been asking for my VAT number recently. Its easy to reply as I have my VAT number in my email footer and their VAT numbers in my database.

I have sent my VAT returns online for sometime and it is a lot simpler than paper. I can do the ESL online too and since I have very few European clients, doing it manuallly after the end of the 1st quarter of 2010 is not a big burden. If you have more, then perhaps its time to look at your accounting software and speak to your accountant. If you are not doing it online yet, now is the time to start. Its very simple.

I am hoping for comments on whether you think these changes have more significance than I have appreciated.


  1. Don't you need to account for VAT on the reverse charge system for services provided by advisors in other EU countries now?

  2. I went on a very good VAT half day seminar put on by HMRC locally. They are still running them : contact Linda Macfarlane on 01473 883306 or email