101 UK Brexit Notes

Connemara Programme October 16 2018 pg. 43 UK businesses exporting goods to EU consumers If the UK leaves the EU without an agreement, distance selling arrangements will no longer apply to UK businesses and UK businesses will be able to zero rate sales of goods to EU consumers. Current EU rules would mean that EU member states will treat goods entering the EU from the UK in the same way as goods entering from other non-EU countries, with associated import VAT and customs duties due when the goods arrive into the EU. UK businesses exporting goods to EU businesses If the UK leaves the EU without an agreement, VAT registered UK businesses will continue to be able to zero-rate sales of goods to EU businesses but will not be required to complete EC sales lists. As UK VAT registered businesses will not be required to complete an EC sales list, there will be changes to how these sales are recorded. Those UK businesses exporting goods to EU businesses will need to retain evidence to prove that goods have left the UK, to support the zero-rating of the supply. Most businesses already maintain this evidence as part of current processes and the required evidence will be similar to tha t currently required for exports to non-EU countries with any differences to be communicated in due course. Current EU rules would mean that EU member states will treat goods entering the EU from the UK in the same way as goods entering from other non-EU countries with associated import VAT and customs duties due when the goods arrive into the EU. Individual EU member states may have different rules for import VAT for non-EU countries and import VAT payments may be due at the border when importing goods. UK businesses should check the relevant import VAT rules in the EU Member State concerned. UK businesses selling their own goods in an EU Member State to customers in that country If the UK leaves the EU without an agreement, UK businesses will be able to continue to sell goods they have stored in an EU Member State to customers in the EU in line with current Rest of World rules. Current EU rules would mean that UK businesses will continue to be required to register for VAT in the EU member states where sales are made in order to account for the VAT due in those countries. You can find further information on EU rules for storing non Union goods in an EU Member State before selling or exporting on th e EU Commission’s website . You can find further information on registering for VAT in EU member states on the EU Commission’s website . UK businesses supplying services into the EU This section provides information about accounting for VAT on services supplied into the EU, and the rules and procedures that will apply. 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. The current ‘place of supply’ rules determine the country in which you need to charge and account for VAT. These rules are in line with international standards set out by the Organisation for Economic Co-operation and Development (OECD), guidelines can be found on th e OECD website . The rules around ‘place of supply’ will continue to apply in broadly the same way that they do now, areas of potential change are flagged below. For UK businesses supplying digital services to non-business customers in the EU the ‘place of supply’ will continue to be where the customer resides. VAT on services will be due in the EU Member State within which your customer is a resident. For UK businesses supplying insurance and financial services, if the UK leaves the EU without an agreement, input VAT deduction rules for financial services supplied to the EU may be changed. We will update businesses with more information in due course. If you are a UK business that currently uses the VAT Mini One Stop Shop (MOSS) you can find more information in the section of this notice regarding access to EU-wide VAT IT Systems. EU Tour Operators’ Margin Scheme The Tour Operators Margin Scheme is an EU VAT accounting scheme for businesses that buy and sell on certain travel services that take place in the EU. HMRC has been engaging with the travel industry and will continue to work with businesses to minimise any impact. UK businesses that access EU-wide VAT IT systems This section provides information on access to EU-wide VAT IT systems, and the rules and procedures that will apply. If the UK leaves the EU without an agreement, the UK will stop being part of EU-wide VAT IT systems such as the VAT Mini One Stop Shop, more detail for specific EU-wide VAT IT systems is set out below.