VAT status of IT contractor services to EU customers

[Imfeelingtaxed]

OK, so IT contracting to UK customers is standard rated, and to non EU customers is outside the scope of VAT, but my understanding is that such servics to EU business customers is outside the scope of VAT as well. Having read the VAT guides several times, I see nothing to argue against my understanding. Surely though this is nonsensical - why should such services be standard rated to UK businesses, but outside the scope to EU businesses - that's why I'm wondering whether I'm reading it right or whether I've missed something.

Following on from this, is that the flat rate scheme is in use. If such services are outside the scope, presumably they don't appear anywhere on the VAT return and EC sales lists aren't needed either.

Any help would be greatly appreciated.

[Generix]

On your first point, by not charging non-EU businesses VAT which would be arguably burdensome to recover it encourages non-EU customers to buy in services from the EU.

For EU businesses, VAT is brought to account, however there is a 'simplification' or 'tax-shift' such that the customer accounts for the VAT on sale (reverse charge).

Per your question on the flat rate scheme and its interaction etc with EC sales list (for services), I have no idea for sure. But assume EC sales list must be completed once you exceed the relavent threshold regardless of whether or not you operate the flat-rate scheme.

(Not sure what the thresholds for both are these days).