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Brexit – ‘no deal’

If there is a no deal Brexit, then the VAT rules on domestic transactions will not change. But, the rules for EU transactions will change:

 

  • Importing goods: the government will introduce ‘postponed accounting’ for import VAT. This means importers will be able to account for import VAT on their VAT return (rather than having to pay the import VAT when the goods are imported).
  • Exporting goods: zero-rating will continue to apply. While there will be no need to complete EC sales lists, there will be a need to retain evidence to prove the goods have left the UK. Note that this will apply to exports of goods to businesses or individuals; the distance selling arrangements for individuals will no longer apply (and all sales of goods to EU customers will be zero-rated).
  • Supplying services: the existing ‘place of supply’ rules, which decide in which country VAT needs to be charged, will remain in effect.
  • EU VAT refunds: it will still be possible to claim VAT refunds from EU states. But, UK businesses will have to use the processes for non-EU businesses (which are often complex, and which vary from country to country).

 

Source: Bryan Cave Leighton Paisner.

 

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