VAT Rules are Changing –
Brexit Transition

With Covid and everything that is happening at the moment, we still need to remember that we’re leaving the EU and the impact that will have on our businesses. The negotiations are still on going, but the following updates for January are changes that you need to be making now.

If you are trading with the EU you will need to understand the new VAT Rules that will apply from 1st January 2021.
 
Exporting Goods
 
If you are transporting goods across the border from Great Britain into the EU or Northern Ireland, then you will need to apply for an EORI number.

You can apply for the EORI number by going to https://www.gov.uk/eori.Note that if you currently have an EORI number, you must check it starts with ‘GB’, otherwise you will need to apply for another one.Note that exports to Northern Ireland is affected by these changes. If you are supplying good to NI then you will need a second EORI Number that starts with ‘XI’. You can only apply for this once you have the ‘GB’ EORI number, so it will be a two step application to get both numbers.
Importing Goods
 
When goods are imported into the UK, they may be liable to Import VAT. This is normally payable at the port before the goods are released.
 
In a view to ease cashflow, and avoid delays at the ports, HMRC have introduced ‘Postponed VAT Accounting’ which allows you to include the Import VAT on your VAT Return. This will mean that you will pay the Import VAT, and if allowed under normal VAT Rules, reclaim the Import VAT at the same time.
Services
 
For services, the rules are staying largely the same and the ‘Place of Supply’ is still the important factor in determining if VAT is charged. You also need to determine if you are supplying services to a business customer, or a non-business customer (i.e. the general public).
Supply of Digital Services
 
The place of supply for digital services will always be where the customer belongs. For those currently using the VAT MOSS System, this will end on 31st December 2020. To continue to use the VAT MOSS system, you will need to register in an EU member state as a ‘non-Union’ member. Alternatively, you will need to register in each member state you supply the services to.
A local VAT Specialist firm, Centurion VAT Specialists, are hosting a Webinar on VAT and Brexit on 15th December 2020 at 14:00. Should you wish to join, there is a charge of £40 per delegate, and details can be found here: https://www.centurionvat.com/event/43/custom/.
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