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10 Post Brexit VAT Tips

We’re now past the Brexit transition period, which ended on 31 December 2020. Now, post Brexit VAT implications for business are here and there is a lot to prepare:

post brexit VAT

1. VAT postponed accounting

If your business is VAT registered, you can request to postpone VAT accounting for worldwide imports of goods, alongside those coming from the EU. VAT is accounted for as a reverse charge entry on the next VAT return rather than payable at the time the goods arrive to support cash flow for businesses.


2. Freight forwarding companies for importers

All imports of goods into Great Britain will now be subject to VAT, customs duty and customs declarations. A lot of emphasis has been placed on ‘correct declarations’. As a result, many importers will be looking to customs agents or freight forwarding companies to ensure they are compliant.


3. Goods leaving GB will be zero-rated for VAT purposes

…as a result, goods will be subject to duty and VAT when they reach the other country. To support zero-rating, businesses must retain proof of export. More information is outlined in the VAT Notice 703 sections 6 and 7.


4. VAT for low value imports is changing

If the goods you buy from overseas suppliers is valued at no more than £135 and you are VAT registered, you will need to account for VAT on your own return by doing a reverse charge entry in Box 1 and 4. If you aren’t VAT registered, the overseas seller (who is obliged to register for UK VAT) will send a VAT invoice.


5. ESLs & Intrastat despatch returns

HMRC still require UK businesses inside Intrastat rules to complete Intrastat arrivals as customs declarations can be deferred until 1 July 2021 for non-controlled imports of goods. However, Intrastat despatch returns and EC Sales Lists will no longer be applicable to all British businesses. Businesses in Northern Ireland are still subject to despatch returns and EC Sales lists for goods, but not services.  


6. Claiming extra input tax

Input tax legislation took effect on 1 January 2021, so input tax can now be recovered for certain financial and insurance services to EU clients. As a result, the same VAT treatment will apply to EU and non-EU services.


7. Register for the non-Union VAT MOSS scheme

If your business supplies broadcasting, telecommunications and electronic (BTE) services to EU customers (B2C), you will need to apply for the non-Union VAT Moss scheme as the annual VAT Moss (mini one stop shop) sales threshold of £8,818 no longer applies to UK businesses. It switched to a zero turnover threshold on 31 December 2020. You must register, even if you only make one BTE sale to B2C customer in the EU.


8. Review rules for B2C services

Some professional services will no longer by subject to UK VAT from 1 January 2021 if supplied to EU B2C customers. However, you may need to register for local VAT in a customer’s country under ‘use and enjoyment’ rules. For more information, review the VAT Notice 741A, section 12.


9. A GB EORI number is crucial for UK imports and exports

It only takes 10 minutes to apply online and you will receive your number from HMRC within seven days.


10. Advice for moving goods from GB to Northern Ireland and vice versa

If you would like advice and help for moving goods between GB and Northern Ireland, register with the Trader Support Service (TSS), which is a free resource. 


Count On Cardens for post-Brexit VAT services

Compliance with VAT is complex and investigations can be intense – all the more important that your VAT returns are completed correctly. Discuss your situation with Cardens so we can support you with the best service: 01273 739592


Client Area

Tax Investigations Protection