It is looking increasingly likely that the UK will leave the EU without a withdrawal deal in place at 11pm on 29 March 2019. In that situation the VAT arrangements that EU member countries benefit from will immediately fall away for UK businesses. This will significantly affect businesses that import and export goods, but other businesses will also be affected by these changes:
Claiming EU VAT refunds
Where a business has incurred VAT on business expenses in another EU country during 2018, it would normally have until 30 September 2019 to reclaim that VAT. HMRC is urging businesses to submit those claims before 29 March 2019, as claims after that date will have to be submitted to the individual countries concerned, rather than through the HMRC portal.
If any of our clients are still registered for VAT MOSS, as the de-minimise threshold of £8188 kicked-in from 1 January 2019 (see our newsletter 29 November 2018), you will have their VAT MOSS registration cancelled automatically from 1 April 2019.
Where the business continues to make sales of digital services to non-business customers in EU countries after 29 March 2019, it will have to re-register for VAT MOSS as a non-EU business in an EU country, (ie not the UK) by 10 April 2019.
The de-minimise turnover threshold for VAT MOSS does not apply for non-EU businesses, so many of the UK businesses which dropped out of VAT MOSS from 1 January 2019 will be pulled back into that regime.
Check VAT number
Currently there is a VAT number checking service to check the validity of EU VAT registration numbers. From 30 March 2019 that service won’t cover UK VAT numbers, but businesses will be able to check UK-only VAT registration numbers on GOV.UK. In addition, UK businesses will continue to be able to use the EU VAT number validation service to check the validity of any other EU VAT registration numbers.
Written by the Tax Advice Network