VAT after Brexit: what you need to know

Following the end of the transition period on 1 January 2021, many businesses are taking on the challenge of overseas accounting for the first time.

To support your business, we’ve answered some of the most common questions we’ve received over the past month.

Is VAT applicable on the purchase of a service from EU countries?

Providing the place of supply is the UK, there are no changes to the purchase of services from the single market. You should give your UK VAT number to the supplier so that they do not charge VAT. Any VAT due will be dealt with as if you had supplied the services yourself.

Is VAT applicable on the purchase of goods from EU countries?

Goods purchased from the single market are now considered “imports”. This means the VAT applicable depends on who is responsible for declaring the goods and paying import VAT. You must give the supplier your UK VAT number and EORI number to ensure you are not charged twice. The postponed VAT accounting scheme has been introduced to help UK businesses pay VAT without disrupting cash flow.

Is VAT applicable on the purchase of a service from non-EU countries?

As we have left the single market, the treatment of services from EU and non-EU countries are now the same.

Is VAT applicable on the purchase of goods from non-EU countries?

Like services, the treatment of goods from EU and non-EU countries are now the same.

Is VAT applicable on the sale of services to EU countries?

There are currently no changes to the treatment of services sold to the EU. You should obtain your business customer’s VAT number and not charge any UK VAT on the supply.

Is VAT applicable on the sale of goods to EU countries?

Goods exported to the single market are now considered “exports”. This means the VAT applicable depends on who is responsible for declaring the goods and paying import VAT. Sales from the UK will be zero-rated if you can prove that the goods have been removed from the UK. If you are responsible for the declaration of goods and paying import VAT, you may be required to register for VAT in the EU country.

What is the non-union VAT Mini One Stop Shop?

Replacing the UK VAT Mini One Stop Shop (MOSS), the non-union VAT MOSS will allow exporters of digital services to the EU to account for VAT in just one country, rather than in all countries of sale. Businesses who exported or plan to export digital goods in January must register before 10 February to benefit from the scheme.

How can I claim a VAT refund in the EU?

UK businesses will no longer be able to recover VAT incurred in other EU countries using an electronic system. VAT refunds can instead be reclaimed using the existing refund system for non-EU businesses.

How can I check if an EU VAT registration number is valid?

Use the EU VAT Registration Number Validation service to check if a customer or supplier’s VAT number is valid. You can no longer check a UK VAT registration number using this service, but HMRC offers a similar service for checking a UK VAT registration, which can be found here.

For help and advice on related matters, please contact our expert Brexit advisory team today.