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EU Trade after Brexit: 20 Real-life VAT Problems Solved

A Tips & Advice Special Report about...

In a nutshell

A stack of new VAT rules for imports and exports of goods and services between the UK and the EU have come into play. There is guidance, but it’s often difficult to apply in a practical context. In this Special Report we cut straight to the chase and look at how the rules work in real-world situations, rather than discussing the ins and outs of the legislation.

In detail

The writer, Neil Warren, is one of the UK’s leading VAT experts. He has pulled together 20 case studies based on real queries he’s been advising on in recent months. At least one of them is sure to cover your situation, including:

  • Selling goods to EU customers
    • A GB business sells goods located in one EU country to a business in another EU country
    • A GB retailer sells goods on her website to private customers in the EU
    • A GB business sells goods to a VAT-registered customer in Northern Ireland (NI) - which will then be sold to customers in both NI and Ireland
  • Buying goods from EU suppliers
    • A GB business imports goods from both EU and non-EU suppliers - how does it complete its UK VAT return?
    • An EU parent company has set up a separate subsidiary company in the UK to deal with its GB imports - how will this work?
  • Selling services to EU customers
    • A UK business sells digital services to both business and private customers in the EU - what has changed since 1 January 2021?
    • A UK builder provides land-related services in the EU
    • Performance services carried out by a UK business in the UK and in the EU
  • Buying services from the EU
  • Miscellaneous queries
    • How and when can VAT incurred in an EU country be reclaimed?
    • The position for digital services for business-to-business and business-to-consumer supplies in the UK and EU.

By focusing on the application of the rules post-Brexit, this Special Report gets you to the heart of the issues affecting these scenarios in a way you can apply to your own circumstances.

We've created this Tips & Advice Special Report especially for... 

Everyone involved in running a business who wants to:

  • Correctly apply the rules for post-Brexit EU trade
  • Get practical insight in the new VAT rules based on real cases

Tax and VAT advisors, bookkeepers and accountants that want to:

  • Be fully up to speed with the stack of new VAT rules for trade between the UK and the EU

In this Tips & Advice Special Report you'll read about...

Section 1. Selling goods to EU customers

Case study 1. A UK business sells goods located in one EU country to a business in another EU country

Pre-Brexit - triangulation

Triangle is broken

Dutch VAT registration?

Commission arrangement?

Conclusion

Case study 2. Goods are shipped from the UK to a Polish business, but the invoice is issued to a French company

Triangulation withdrawn

UK VAT - zero-rated export

Goods arrive in Poland

Who is the importer?

Customer refuses to act as importer

Conclusion

Case study 3. A GB retailer sells goods on her website to private customers in the EU

Pre-Brexit

Post-Brexit - UK VAT returns

Arrival in the EU

EU changes - July 2021

Conclusion

Case study 4. A GB business sells goods to another GB business but arranges for them to be directly shipped to a business in an EU country

Who is the importer and exporter?

Supply chain

Transport service

Arrival in Ireland

Twist to the tale

Conclusion

Case study 5. A business transfers stock to an EU business, which “calls off” the stock when it is required

Call-off stock procedures until 31 December 2020

Import VAT

Belgian VAT registration

Nil registration threshold

Conclusion

Case study 6. A GB business sells goods to a VAT-registered customer in NI which will then sell them to customers in both NI and Ireland

Northern Ireland Protocol

Imaginary border in Irish Sea

Customs declarations

What about own stock?

Conclusion

Section 2. Importing goods from EU suppliers

Case study 7. A GB business imports goods from the EU: getting the import procedures right

Previous rules

New procedures

Importer of record

EORI number

Rules of origin

Conclusion

Case study 8. A business imports goods from EU and non-EU suppliers. How does it complete its UK VAT return?

Postponed VAT accounting (PVA)

Customs Declaration Service (CDS)

Delayed declarations

VAT return check

Conclusion

Case study 9. An EU parent company wants to set up a separate subsidiary company in the UK to deal with its GB imports

Purpose of arrangement

The supply chain

Invoicing arrangements

Is a subsidiary company necessary?

Conclusion

Case study 10. An EU business sells goods valued below £135 to private UK customers via its website and an online marketplace

New rules since 1 January 2021

Charging sales VAT?

Customer is VAT registered

NI sales

Conclusion

Section 3. Selling services to EU customers

Case study 11. A UK business sells digital services to both business and private customers in the EU. What has changed since 1 January 2021?

Business customers

Non-business customers

What is different post-Brexit?

EU VAT rates

Conclusion

Case study 12. A UK business provides professional services to B2B and B2C customers in several EU countries

B2B general rule is unchanged

B2C professional services

Use and enjoyment rule

The solution?

Conclusion

Case study 13. Performance services carried out by a UK business for both UK and EU customers

Place of supply B2C

Place of supply B2B

VAT registration in EU - pre-July 2021 rules

What changed on 1 July 2021?

Conclusion

Case study 14. A UK builder provides land-related services to business and private customers in Ireland and NI

Place of supply

NI is part of UK for services

B2B services in Ireland

What about private work in Ireland?

Conclusion

Section 4. Buying services from the EU

Case study 15. A UK business is using an EU subcontractor to assist with a consultancy contract carried out for another business in a different EU country

Post-Brexit changes

Buying services from abroad

What about VAT paid on expenses in Germany?

NI adopts UK rules for services

Conclusion

Case study 16. An EU business rents an office in the UK. Can it reclaim VAT on the rent and other expenses?

Reverse charge in the UK

UK expenses

Land supplies are subject to UK VAT

VAT refund claim to HMRC

Conclusion

Section 5. Miscellaneous queries

Case study 17. How and when can VAT incurred in an EU country by a GB business be reclaimed?

No taxable supplies

Swedish VAT

13th Directive claim

Alternative approach?

Conclusion

Case study 18. What is the position on digital services for B2B and B2C supplies in NI and Ireland?

Place of supply for services

Digital services

Non-Union MOSS scheme

Conclusion

Case study 19. Goods are purchased from the EU and shipped directly to Ireland without entering GB. Some are sold onward into NI

EU and non-EU movements of goods

What are the supplies?

VAT registration in Ireland

VAT liability of sales

Conclusion

Case study 20. A GB business is to start trading with EU customers in goods and services and is looking for a checklist of crucial things to consider

A GB EORI number is essential

Consider using a customs agent or freight forwarder

Elect for postponed VAT accounting (PVA) for all imports

Sales VAT is due for imports of £135 or less

All exports from GB are zero-rated

EC Sales Lists and Intrastat despatch returns are no longer needed

Digital supplies to non-business EU customers - register for the non-Union MOSS

Many B2C services are no longer subject to UK VAT

Reclaiming overseas VAT - use the 13th Directive system

Consider registering with the Trader Support Service (TSS)

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