VAT News

BREXIT – The Day After the Night Before


Just a quick update to ease concerns out there that the VAT arrangements that the UK works under radically changed at 11pm on the 31st January 2020. As regular readers of our News Bytes will know here at Centurion VAT, we’ve been keeping you up to date as news has emerged, on the VAT front, as the various deadlines for Brexit came and went and came and went again. Last Friday did see the first part of Brexit happen but to all intents and purposes nothing has actually altered in the VAT regime we follow. Nor should core arrangements be affected UNTIL we come to the end of the transition period which is the 31 December 2020.

The VAT rates will remain as they are, unless the Chancellor chooses to amend rates in the March Budget, but even then, the Standard rate of VAT cannot currently be set at less than 15%. Items still cannot be added to the zero rate list of current items – so the debate on the taxation of female hygiene products may continue in the media but little else can be changed until the point at which we leave the Single Market.

It was interesting that the only query received on the matter last week was prompted by the concerns of an EU customer who had told its UK based supplier that they – the UK business – would have to immediately become VAT registered on the 1st February in the state of the EU customer as a result of Brexit day happening. It seems that businesses in the EU can be as confused by the implications of the 31st January as the UK might be.

VAT rules for supplies of goods and services into the EU will remain as they currently are – as will the treatment of goods and services supplied into the UK from the EU. Yes, there have been some changes which took effect from the 1st Jan on the movements of goods into the EU, but these were driven by existing EU plans for the harmonization of trading arrangements. For details of these changes for Call-off stock and for the changes to Proof of Removal requirements please click through to our recent updates.

We do have to remain aware that changes will be forthcoming as we move through the year. HMRC has recently updated its guidance for the EC Sales List completion and, as the political statements in the last week coming from UK Government seem to re-enforce, the line taken is that the UK will not be bound by EU regulations. This seems to steer us clearly away from an arrangement with would include membership of the Single Market and the Customs territory. If this political road map is followed for the economic direction of travel then all of the proposed “No deal” guidance issued in the run up to October 2019 for VAT purposes will come back into play – Transitional Simplified Procedures and Postponed VAT Accounting, the end of a Union MOSS membership and access to EU Triangulation relief etc – so it’ll remain important to keep engaged in the issues as time will be needed to plan the systems changes, staff training and changes to accounting processes and coding that will have to be addressed.

An ”Inform and Plan” session with Centurion VAT can help you focus on the issues relevant to your business. Some will be largely unaffected on the VAT front but those involved with the import and /or the export of goods will have issues to address. If nothing else please sign up to ensure you receive our VAT updates – you can do so on our website or use stating “Opting in for VAT Updates” .

Centurion VAT – we’re here for when VAT gets complicated.

For the avoidance of doubt, the content recorded in this news article does not constitute formal advice and we do not guarantee the accuracy of any information provided at the time of reading. It is always recommended that you should seek professional advice before acting on any of the news articles or information included.

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