Newsletter Autumn 2016

Avoid an ESL penalty

An EC Sales List (ESL) must be completed by businesses who sell any goods or services to businesses in other EU countries.

The ESL is generally required to be submitted each quarter, but large businesses may submit them monthly, and those on the annual accounting scheme can apply to submit an annual ESL. In every case an electronic ESL must be submitted within 21 days of the end of the period, or 14 days for the paper version of the form. HMRC can levy penalties for late ESLs, but normally they issue a warning first. Once on HMRC’s radar for late submission the penalty is £5 per day, rising to £15 per day when you have submitted three or more late ESLs in a year. The penalty is capped at 100 days.

If you make a mistake in your ESL you can make a correction within 21 days of submitting the ESL. Other errors can be corrected on form VAT101B. If HMRC discover the error before you do, they will send a polite warning letter. A second or subsequent error will trigger a penalty of £100.