Even though a Trade Agreement was signed between the EU and the UK the impact on VAT has not been softened. Therefore we have outlined possible post-Brexit situations that will help you understand where your business is standing now that the UK has left the EU and what you need to do. For more in-depth information regarding minimizing the impact of Brexit please contact our experts in order to receive a tailor-made assessment for your business.
VAT registration is required in EU countries as distance selling arrangements no longer apply. Fiscal Representation may be required in certain EU countries. When moving goods, export are zero rated and EC Sales Listing no longer applies for UK businesses; and imports are subject to Import Vat (if consignment is worth over EUR22) and Import Duties (if consignment is worth over EUR 150). For UK sellers sending goods to the EU, LVCR continues to apply. UK businesses are likely to apply for a EU/UK EORI number.
UK → Goods are zero rated in the UK.
EU → For goods up to the local Low Value Consignment Relief (LVCR) in the country of destination, no VAT is due. For goods exceed the LVCR for VAT has to be paid by the consumer. (These rules will change on 1 July 2021).
UK (export) → Export of goods are zero rated. No more EC Sale List is required but evidence of export must be retained.
EU (import) → Associated Import VAT and Customs Duties (if consignment value is over GBP 150) due when the goods arrive into the EU. Fiscal Representation required in certain countries for non-EU business.
EU → Goods are zero rated in the country of departure.
Consignment’s value GBP135 or less VAT registration with HMRC is required. Import VAT is exempt. Seller has to charge UK VAT at a point of sale and remit to HMRC in quarterly VAT return.
Parcel’s value more than GBP135 Import VAT and Import Duties apply. VAT is paid by consumer.
EU (exports) → Goods are VAT zero rate in the country of departure.
UK (import) Consignment’s value GBP135 or less VAT registration with HMRC may be required. Import VAT is exempt. Seller has to charge UK VAT at point of sale and remit to HMRC in quarterly VAT return. If UK buyer provides valid UK VAT ID number then no VAT has to be charged at point of sale and VAT reverse charge can be applied.
UK (import) Consignment’s value over GBP135, subject to Import VAT and Custom Duties due by the UK recipient of the goods. Buyer can normally apply Postponed Accounting for import VAT.
These different Brexit impact situations mentioned in our page entail further intricacies as they depend on the nature of each sale. Each seller will be impacted on a different level depending on a variety of factors. Global VAT Compliance offers a free VAT assessment tool with which you can find out if you are in need of a VAT registration in the UK.
UK to EU → Treated as an Export. Zero rate. No EC Sales Listing required anymore.
EU to UK → Treated as an Import. Import VAT and custom duties (if consignment value is over GBP 135) in the UK. VAT registration required in the UK.
EU to UK → Treated as an Export. Zero rate.
UK to EU → Treated as an Import. Import VAT and custom duties (if consignment value is over EUR 150 in Member State of destination/importation. VAT registration required in the UK.
→UK business will need to register under the non-EU VAT MOSS scheme in an E27 member state
→EU business will need to VAT register in the UK for to report VAT on digital services in the UK
→ Non-EU business with UK VAT MOSS registration and any other EU establishment will need to move their VAT MOSS to an E27
→Non-EU business with only UK establishment will need to register under the non-EU VAT MOSS scheme in an E27 member state
All businesses selling their products to the UK have many factors to take into consideration as they need to pay attention to a wide range of new rules such as consignment value, location of the goods, or the involvement of an online marketplace.
With postponed accounting, a business can declare and recover VAT on imported products on the same return instead of paying VAT on import
Global VAT Compliance can ensure that your VAT registrations will be a smooth and efficient process and that your company will be free of any Brexit VAT implications. Our in-depth knowledge and experience will make your VAT reporting is always accurate and timely; taking into consideration all new requirements and rules.
Global VAT Compliance will make sure you are VAT compliant post-Brexit.