The UK is less than six months from leaving the EU, and the future relationship is still unclear. What do HMRC’s newly published “no-deal” plans mean for your VAT accounting?
Publication. HMRC has published guidance for businesses that trade with the EU about what to expect if no deal is reached (see The next step ). How would your VAT reporting be different?
Importing. If you import goods from the EU and want to continue after a no-deal Brexit, you would need to undertake significant administration. This would include setting up systems to enable import and customs declarations to be made accurately.
Tip. If you import a substantial amount of goods, using a customs broker may be a better option, although this will carry a cost.
Helpful. To help avoid cash flow problems, HMRC would allow import VAT to be paid via the VAT return rather than at the point of entry to the UK. This should put to bed any fears that VAT will be demanded up front. This would apply to goods imported from non-EU countries as well.
Exports. If you export goods to EU customers, you would need to zero rate them in the same way you do for exports to non-EU countries. If you sell to EU businesses, you would be able to continue zero-rating them, but not need to complete an EC sales list. For exports of services, the place of supply rules would continue to apply as they do now.
Refunds. One area that would change is how you access the EU VAT Refund System. You would need to claim refunds directly from the particular EU country that the VAT was paid in, instead of from HMRC. Each country has its own particular rules, so you would need to check the process each time you incur VAT in a new country.
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