The Government has set out the VAT implications for businesses in the event of a “no-deal” Brexit.
For most UK businesses there will be no change to the VAT rules.There will, however, need to be some specific changes to VAT rules and procedures applying to transactions between the UK and EU member states.
The key change is that postponed accounting for import VAT on goods brought into the UK will be introduced, which should keep processes similar to now and mitigate any adverse cash flow issues.
Other changes will be required for:
•VAT on goods entering the UK as parcels sent by overseas businesses
•VAT on vehicles imported into the UK
•UK businesses exporting goods to EU consumers
•UK businesses exporting goods to EU businesses
•UK businesses selling their own goods in EU Member State to customers in that country
Place of supply rules for UK businesses supplying services into the EU
If the UK leaves the EU without an agreement, the main VAT ‘place of supply’ rules will remain the same for UK businesses.
Read the full document here.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.