EC sales list (ESL)

Definition

The EC sales list (ESL) is a reporting requirement enforced by HM Revenue and Customs (HMRC) for businesses registered for VAT that engage in the supply of goods or services to VAT-registered customers in other European Union (EU) member states. 

What is the EC sales list?

The EC sales list is part of the VAT reporting framework and is used to monitor and control cross-border transactions within the EU’s single market.

VAT-registered businesses in the UK are required to submit EC sales lists to HMRC to report details of their domestic sales. This includes sales of goods or services to VAT-registered customers located in other EU member states.

The EC sales list typically includes information such as the VAT registration numbers of both the supplier and the customer, the value of the goods or services supplied, and details of the transactions, such as the date and nature of the sale.

Businesses are generally required to submit EC sales lists on a monthly basis. However, certain businesses may be eligible to submit ESLs on a quarterly basis if their domestic sales do not exceed a certain threshold.

Businesses must ensure that their ESLs are accurate and complete. HMRC closely monitors compliance with ESL reporting requirements and may impose penalties on businesses that fail to submit accurate and timely EC sales lists. Penalties for non-compliance can vary depending on the severity of the breach and may include fines and other sanctions.

Example of the EC sales list

Let’s say Company A, based in the UK, sells £10,000 worth of electronic equipment to Company B, which is VAT registered in France.

• Registration: Both Company A and Company B are registered for VAT in their respective countries.
• Sale: Company A invoices Company B for £10,000 for the electronic equipment.
• EC sales list: Company A is required to include this sale on their EC sales list when submitting their VAT return to HMRC.
• Submission: Company A submits their EC sales list along with their VAT return to HMRC.
• HMRC verification: HMRC verifies the details provided by Company A against their records and ensures compliance with VAT regulations.