VAT

VAT After Brexit

VAT After BrexitWhat will VAT after Brexit mean for you and your business if “No Deal” becomes a reality

Although, we are yet to have an outcome, this is what the government believe VAT after Brexit “No Deal“ will mean for you.

VAT after Brexit – if there’s no deal?

The top priority of the government is delivering a negotiated deal with the EU. However as the deadline looms ever closer, the need to be prepared for a “No Deal” consequence should be addressed.

Furthermore in the event of a no deal Brexit. The government are taking a responsible approach in helping businesses consider how a “No Deal” scenario could affect them. Assisting in taking steps to reduce such risks dealing with VAT after Brexit and other such issues.

As per the Government website, there will be no change to VAT rules for most UK businesses. UK businesses that are affected may wish to consult other relevant technical notices, including the Trading with the EU if there’s no Brexit deal notice, which covers customs, excise and import processes at the border.

VAT after Brexit – After 31st October 2019 if there is no deal

As previous, the VAT rules relating to UK domestic transactions will continue to apply to businesses as they do now. If no deal, the government hope to keep all dealings between the UK and EU members as close as possible. There will be some specific changes to the VAT after Brexit rules and procedures that apply to transactions between the UK and EU member states.

VAT after Brexit – UK businesses importing goods from the EU

If there is a no deal. The current rules for imports from non-EU countries will also apply to imports from the EU, with some changes. Businesses that import goods into the UK may wish to consult the following.  Trading with the EU if there’s no Brexit deal (VAT after Brexit) technical notice on the governments’ website. This covers import processes at the border.

VAT after Brexit – Accounting for import VAT on goods imported into the UK

The government will introduce postponed accounting for import VAT on goods brought into the UK. This means rather than paying import VAT on or soon after the time that the goods arrive at the UK border. All UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, this will apply both to imports from the EU and non-EU countries for VAT after Brexit.

VAT after Brexit – VAT on vehicles imported into the UK

Businesses should continue to notify HMRC about vehicles brought into the UK from abroad as they do now. (NOVA)

As a result of the UK leaving the EU (VAT after Brexit), import VAT will be due on vehicles you bring into the UK from EU member states. However reliefs will also be available as with current imports of vehicles from non-EU countries. Businesses will need to continue to use NOVA to verify that VAT is correctly paid on imported vehicles.

VAT after Brexit – UK businesses exporting goods to the EU

As a result of the UK leaving the EU, businesses may need to plan for customs and VAT processes.  This will be checked at the EU border. This can be done via checking with the EU to see which rules and processes apply.

VAT after Brexit – UK businesses exporting goods to EU consumers

If a “No Deal” Brexit takes place, distance selling will no longer apply and UK businesses will be able to zero rate sales of goods to the EU consumers. This is the same treatment for sales being accounted for outside of the EU for VAT after Brexit.

VAT after Brexit – UK businesses exporting goods to EU businesses

Therefore if a VAT after Brexit “No Deal” takes place. VAT registered UK businesses will continue to be able to zero-rate sales of goods to EU businesses but will not be required to complete EC sales lists.

UK businesses exporting goods to EU Businesses will still, however need to record the sales and retain proof that the goods have left the UK to support the Zero rating of the supply.

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