Brexit and VAT
The impact of Brexit on some businesses has been far-reaching, in particular when we look at the changes to VAT and administration at Customs from
1 January 2021 when the UK ceased to operate in the EU.
Prior to Brexit Great Britain was part of the EU VAT regime and this meant businesses could use a range of VAT simplifications to ensure imports and exports could flow more freely and with less administration. From 1 January 2021 imports and exports between Great Britain and EU countries are treated differently.
VAT is now payable on imports into Great Britain; however, the UK Government has introduced the postponed VAT payment system for goods being used by businesses. In most circumstances, payment of the VAT due on import can be deferred to the next VAT return which will significantly aid cashflow and speed up the movement of goods.
The rules on exports between businesses remain largely similar, however there are significant changes for businesses selling goods to domestic customers in the EU which may result in the need to register for VAT in the country where the customer is based.
If you would like any further information or would like to discuss the impacts on your business in more detail please don’t hesitate to get in touch.
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