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VAT and no Brexit deal

VAT and no Brexit deal
Wednesday, October 03, 2018

Whether you voted to remain or to leave the European Union, the drama (for want of a better word) involved in exiting the trading and political bloc has not stopped since June 2016. As part of its preparations for a no-deal post-EU world, the British government have been producing various white papers with the intention of giving UK businesses time to prepare for such an outcome.

With one third of all British businesses registered for VAT and many of those doing business with the European Union, what happens with VAT itself after March 29th 2019 may mean a lot of upheaval as we prepare for life after that date.

The Association of Chartered Certified Accountants recently welcomed the guidance produced by the UK government, but what is it that British businesses exporting to the EU need to know? Panthera Accounting summarises…

What are the current rules?

For business transacted by March 29th, 2019, we know the following for sure as they are the current rules we abide by:

  • You charge VAT on most services and goods when you sell them in the UK or to another EU country
  • If you sell goods to non-EU countries and businesses within the EU which are zero-rated, you don’t charge UK VAT at the point of sale
  • For any services you sell, you charge and account for VAT at the rate within the country that supply those services
  • If you export goods into the UK, VAT is payable. The VAT rate you pay depends on whether the goods themselves came from within or without the EU
  • Goods you sell to consumers in the EU will pay either UK or EU VAT – which rate they pay is governed by distance selling thresholds.

Easy enough? But what will it be like without a deal? Below, we look at the latest government advice.

What are the current no-Brexit-deal proposals for VAT?

There is still a great deal of concern that the Brexit date may arrive before a VAT agreement is made. While this is rather unlikely, the government have released further guidance to “prepare for all eventualities, including ‘no deal’, until we can be certain of the outcome of [these] negotiations.”

So what can UK businesses expect if no deal is arranged by March 2019?

Goods imported into the UK

Without a deal, the same rules on import VAT will apply to exports from everywhere whether they’re in the EU or not. To assist UK businesses, your company will be allowed to account for import VAT on your return rather than having to pay it when the goods arrive in the country.

Goods arriving in the UK will be subject to import VAT (unless they’re zero rated in the UK) as well as on cars (with certain reliefs being applied to non-EU imports).

Goods your UK business exports to the EU

Currently, there is a complex system when applying VAT to sales by consumers based in the EU. You will now be able to zero rate all of your sales to personal EU customers.

If you sell to other businesses, you’ll be able to continue to zero-rate sales of all goods to those in the EU but you’ll no longer have to complete EC sales lists. When you do supply businesses, you’ll still have to keep proof that the goods have left the UK in case HMRC wants proof.

Services your UK business supplies to the EU

For financial and insurance products, there is no word yet on input VAT deduction rules.

For digital services, you’ll have to charge VAT at the rate set in your customer’s home country, still.

The UK will leave EU-wide VAT system arrangements

VAT MOSS will be no more for UK businesses. You’ll still be able to register for it but you’ll have to do so in a country which remains in the EU.

EU VAT refunds

Instead of using the current EU system, companies claiming VAT refunds from suppliers based in the EU will now use the same process that is currently in place for VAT refunds from non-EU companies.

VAT registration number validation (EU)

UK VAT numbers will disappear from the EU VAT registration number validation system although you will still be able to check potential customers and suppliers’ VAT numbers by using the current system. HMRC is setting up a UK-specific version for VAT number validation but there’s no specific launch date just yet.

Expert business and financial guidance from Panthera Accounting

For support and advice on VAT and all other business financial matters, please call us on 01235 768 561 or email enquiries@pantheraaccounting.com. 

What our clients say

For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

Pete Dungey Kaleido Grafik Limited
Anita van Eijndhoven

Talk Our Language

The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

Anita van Eijndhoven Quidne-IT
Ash & Tim Lane

Panthera brush aside the stereotype of the typical accountant

We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

Ash & Tim Lane Starveacre Fencing
Jayne Johnson

An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

Jayne Johnson Better People
John Baker

Absolute joy - they provide a first class service on every level

Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker BKR Solutions
John Castle

Professional and Friendly

I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison Wallingford Builders
Pippa Scott

Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott Scott's Commercial Services Limited
Sara Southey

Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey Bluestones Garden Design
Tracey Miller

Panthera are fantastic.

Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller Bigger, Brighter, Bolder BBB

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