5 November 2007
A number of changes to VAT invoicing regulations came into force on 1st October 2007, bringing domestic legislation into line with EU VAT law. Your business is most likely to be affected by the changes if you:
- Use a margin scheme for second-hand goods, antiques, works of art and collectors’ items
- Use the Tour Operators’ Margin Scheme (TOMS)
- Sell goods or services to customers in other EU member states
- Sell goods or services to customers outside the UK where the customer accounts for the VAT
- Operate the Gold Scheme in the UK
- Account for your supplier’s VAT under the new anti-fraud rules for sales of certain goods in the UK
How will my business be affected?
- All VAT invoices must now bear a unique reference as part of a sequential numbering system. As most businesses will already comply with this requirement, it should not have a major impact.
- If you use either a second-hand margin scheme or the Tour Operators’ Margin Scheme, your invoices must now include a statement specifying the VAT treatment. The invoice must also make reference to the appropriate UK or EU legislation. In the case of TOMS, this will only apply to sales made to other VAT registered businesses.
- If you sell goods or services to customers in other EU member states where the sales invoice is either zero-rated (goods) or outside the scope of VAT (goods or services), or your customer accounts for your VAT through their own VAT returns under a reverse charge, your invoice must now include a statement specifying the particular VAT-free treatment being operated - the choice of statement used is at your discretion. A reference to the UK or EU legislation will not be required in these circumstances.
- A reference to the appropriate UK or EU legislation will be required if you issue invoices for intra-EU supplies of goods in the following circumstances:
- You sell goods to intermediate suppliers or agents in other EU member states
- You sell goods as an intermediate supplier or agent
- You supply and install goods in another EU member state
The changes to VAT invoicing regulations came into force on 1 October 2007, however, HMRC have indicated that they will apply a light touch during the first year of the new regulations.
For further details of the statements and legislative references required, please contact UHY Hacker Young’s VAT department.
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