Brexit from EU - Some Thoughts Regarding VAT

Well, as things stand in September 2016 we do not yet know when our exit from the EU will actually happen and neither does the Government. It may be late 2019, which seems to be the current opinion but until negotiations are concluded we do not know what the actual effects will be to the UK’s VAT system.

It may mean less paperwork, such as not having to submit EC Sales Lists and Intrastat declarations on a monthly basis but it could lead to more physical checks and controls on goods coming into and leaving the UK as far as the other EU Member States are concerned. Goods heading for the rest of the EU will once more almost certainly have to be treated like exports elsewhere.

Customs duties may have to be re-imposed on certain goods entering the UK and the same could apply in the rest of the EU when goods are sent there from the UK. Import VAT on goods entering the UK could also be re-introduced taking us back to the pre-2003 position when the Single Market was formally introduced.

But there could be other more complicated changes required. The MOSS system, for example, only recently introduced throughout the EU for many services rendered to private individuals in a different country than the provider may have to be amended for UK businesses. Some suppliers may be required to register for the first time in another or multiple EU Member States.

All will no doubt become clear in due course and, until Brexit actually happens, UK businesses will have to comply with existing VAT legislation both here in the UK and in the rest of the EU. After that, the UK should have more flexibility when it comes to changing the VAT rules, which are currently supposed to mirror those imposed by the EU.

So, it may be a while before we can actually start planning but businesses do need to be aware that some VAT changes will come about as a result of the UK’s leaving the EU.

Outhwaite Associates are here to help and provide guidance as and when necessary and do feel free to give us a call now, without prejudice!