Confused by post-Brexit VAT? Here are six things you need to know…03/02/2021
Since Britain left the European Union (EU) on 1st January 2021, trade between the two has ceased to be tariff-free. If your business has any dealings with the EU, this may well affect you – and you might find yourself in unfamiliar territory. At JW Hinks, we are prepared to help businesses navigate through this unfamiliar territory as easily as possible. Today, we’ll explain what you need to know about VAT through six questions and answers…
1. Is VAT payable on goods and services from EU countries?
You don’t need to pay VAT on services from EU countries provided the place of supply is within the UK. Just give your UK VAT number to your supplier to make sure you’re not charged. Any VAT due will then be handled as though you supplied the service yourself. Goods, however, are a different story, and are now classed as “imports”. This means VAT due is dependent on who declares the goods and pays import VAT. Give your supplier your UK VAT number and EORI number to avoid being charged twice.
2. What about VAT payable on goods and services to EU countries?
There are no changes in the way services sold to the EU pay VAT: get hold of your customer’s VAT number and don’t charge UK VAT on supply. However, goods sent to the EU are now classed as “exports” meaning VAT due is dependent on who declares the goods and pays import VAT. If that’s your business, you may be required to register for VAT in the EU country you are exporting to.
3. What about goods and services to and from non-EU countries?
As of January 1st 2021, there is now no difference between goods and services from/to EU countries, and those from non-EU countries.
4. I have heard of a “non-union VAT Mini One Stop Shop” – can you explain?
The non-union VAT Mini One Stop Shop is a replacement for the UK VAT Mini One Stop Shop (MOSS). It allows exporters of digital services to the EU to pay all VAT in one country, rather than multiple countries in the bloc. If you want to take part in this scheme (and we strongly suggest it for those businesses who sell in multiple EU countries) then you need to register before February 10th 2021.
5. How do I claim an EU VAT refund?
As of 1st January 2021, you claim EU VAT refunds through the existing system for non-EU businesses, not through the electronic system previously used.
6. How can I check VAT registration numbers?
After Brexit, you have to check EU VAT registration numbers with the EU Registration Number Validation service. You can access a similar service for UK-based VAT registration numbers in Britain through HMRC.
If you’re struggling to make sense of VAT post-Brexit, please get in touch with JW Hinks to see how we can help. We can walk you through the new processes and systems, double check that you’ve paid everything due, and help you make the most of the postponed VAT accounting scheme, which will help UK businesses to pay VAT without disrupting cashflow.