VAT 101 - EC Sales List

[ShandyDrinker]

Thanks everyone. Sounds like the accountant was on the money with the Indicator 3 for reverse charge then...

I did seek the advice of an Irish Accountant before I started and filled in the necessary paperwork to register with the revenue in Ireland. Once registered the company is able to supply services for up to 183 days, providing proof that PAYE/NICS are being paid in the UK are supplied to the Irish revenue. After that time I believe you have to make a decision between opening an Irish Ltd company or going through an Umbrella company in Ireland instead. The contract is only for 6 months so I'll cross the bridge of what to do next if/when the time comes.

The scary thing is that when I was initially negotiating the contract through an agency in Dublin, they said most people from the UK just come and work through either their UK Ltd or an Umbrella without finding out what the tax implications could be... If I knew I could end up with a massive tax liability down the line it would have been a deal breaker.

[Greg@CapitalCity]

Use 3

Use 3 on the ECSL.

Ditto re SueEllen - although unrelated to VAT, be careful of the tax residency of your company. If the contract is for more than 6 months (admittedly just a rule of thumb) investigate ways of ensuring your UK company does not become resident for tax in Ireland.

[SueEllen]

If you are working in Ireland I hope your company has more than one UK based director in place before you started working on the contract and all your board meetings, company decisions etc are made in the UK.

And the VAT helpline in the UK will direct you to the correct information on invoicing for VAT across the EU. (There is a booklet for it and they have now started workshops on the subject.)

[BlasterBates]

I would go and see an Accountant in Ireland. On the whole, and there are some exceptions, you will be taxed where you work, even if it is a few weeks, and the Irish authorities will probably be expecting you to register with them.

I would check this because contractors do find themselves facing penalties several years after they left some European country they worked in, and competely forgot about.

The six month rule, often quoted, does not apply to businesses.

My understanding is in most countries the tax authorities wouldn't tolerate more than a few days of work before they'd demand their tax from a one man company.

[ShandyDrinker]

I've recently started a contract in Ireland working through a UK Limited company and have to fill in an EC Sales List form. In the final column of the form there is a value for Indicator 0, 2 or 3 (I know... it's a really user friendly form). Initially I thought I should complete the form with Indicator 0, however, my accountant has advised me to use Indicator 3 (which means that the services should be subject to a reverse charge). Even though I am not invoicing for VAT on the contract (as firstly the contract states I can't and secondly I shouldn't do invoicing an Irish company from the UK), the accountant explained that the reverse charge is there to ultimately inform the Irish revenue in this case that the agency I am working through should be charging VAT to the end client.

Does anyone else have experience of this form and which Indicator do you use?

Cheers,

ShandyDrinker