“No Deal” Brexit – Changes to EU Rules VAT

At present there is no certainty to the outcome of the negotiations the UK Government is having with the EU. Businesses will have to prepare themselves for the outcome of these negotiations. There are two possible outcomes.

If an agreement with the EU is reached for an orderly exit
Trading to and from the EU will broadly remain the same for 21 months from 29 March 2019 to 31 December 2020 (implementation period). During this period new changes to VAT Law and Practice will be implemented. We will have plenty of time to consider the changes and to advise you. The current political position is that, an agreement has been reached with the EU for an orderly exit but that agreement may not be implemented if there is a “NO DEAL” Brexit.

If there is “NO DEAL” and the UK leaves the EU
Changes will take place immediately on 29 March 2019. The sale to the EU and purchase from the EU of goods by UK companies and conversely the sale to the UK and purchases from the UK of goods by EU companies will immediately become subject to customs, excise and VAT procedures. We already deal with many clients who export to import from outside EU and will of course be in a position to help you with any transitional issues. Fundamental changes will take place to UK Businesses and to EU Businesses if there is “NO DEAL” rather than the UK is in agreement with the EU. It is advisable for UK business and EU Businesses to know and prepare for this situation. We have therefore outlined the areas with major changes that will take place with regard to VAT if there is “NO DEAL”.

The following are the areas in which changes to VAT will be affected:

  • Import
  • Low Value Consignment Relief (LVCR)
  • VAT on vehicle imported into the UK
  • Export
  • UK businesses exporting goods to EU consumers
  • UK businesses selling their own goods in an EU member state to customers in that country
  • Place of supply rules for UK businesses supplying services into the EU
  • UK VAT Mini One Stop Shop (MOSS)
  • EU VAT registration number validation
  • Making tax digital

To read detailed updates of the above changes, click here.