Brexit - Filing your form VAT 100 Value Added Tax Return
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VAT impact on trade with EU
UK importers from EU may have a big negative cash flow impact to their trade depending on UK-EU negotiations and subsequent UK legislation. When importing £1,000 of VATable goods from Eire or France £200 VAT would need to be paid to H M Revenue & Customs when the goods are landed in UK.
There is a proposal to defer the UK VAT payment date until the date of the next VAT return. This would help the VAT payable on imports to be ‘matched’ with VAT payable on sales.
EU buyers of UK goods may need to appoint agents in the EU countries to deal with local VAT regulations which are likely to be similar to those in UK; the buyer needing to pay EU VAT when the goods are landed. Exporting £1,000 of goods to Eire or France local regulations VAT would need to be paid by the customer to the Irish or French VAT authorities when the goods are landed in the EU country.
There is a proposal that EU countries defer the VAT payment date until the date of the next VAT return. This would help UK exporters to compete with EU suppliers and is clearly a point subject to UK-EU negotiation.
There could be changes to VAT returns depending on the outcome of UK-EU negotiations and subsequent UK legislation.
inside and outside EU
Read more
VAT 27 EU member list
Current VAT return boxes (VAT100) are:
| VAT Box | VAT Return description | Our notes | Sales/Outputs figures Purchases/Inputs figures |
|---|---|---|---|
| (Box 1): | VAT due in this period on sales and other outputs | + Payable | £ |
| (Box 2): | VAT due in this period on acquisitions from other EC Member States Our note: This is an in and out pay/reclaim transaction but the reclaim could be disallowed |
+ Payable include "-" in (Box 4): |
£ |
| (Box 3): | Total VAT due (the sum of boxes 1 and 2) | = | £ |
| (Box 4): | VAT reclaimed in this period on purchases and other inputs, (including acquisitions from the EC) | - Reclaim | £ |
| (Box 5): | Net VAT to be paid to HM Revenue & Customs or reclaimed by you (Difference between boxes 3 and 4) | = Pay this |
£ |
| (Box 6): | Total value of sales and all other outputs excluding any VAT. Include your box 8 figure | Statistical | £ |
| (Box 7): | Total value of purchases and all other inputs excluding any VAT. Include your box 9 figure | Statistical | £ |
| (Box 8): | Total value of all supplies of goods and related costs, excluding any VAT, to other EC Member States | Statistical and VAT101 form |
£ |
| (Box 9): | Total value of all acquisitions of goods and related costs, excluding any VAT from other EC Member States | Statistical | £ |
| VAT101 to report the value of goods and services supplied to VAT-registered businesses in EU member states, by customer with their EU VAT number. | |||
| After completion of Brexit there may be the need to include additional Lines on form VAT 100 Value Added Tax Return: | Sales/Outputs figures Purchases/Inputs figures |
||
| VAT due in this period on acquisitions from non EC Member States | £ | ||
| There could be new lines applicable to Northern Ireland | £ |
Changes due to Brexit
- Normal terms
- VAT is payable to HM Revenue & Customs when goods are imported to UK.
- VAT registered traders charge VAT-on-all-applicable-sales, Outputs Tax, in UK and pay this to HM Revenue & Customs after deducting VAT-paid-out, Inputs Tax.
- VAT is not charged on exports.
- EU terms
- There have been special terms for UK-EU imports and exports which may no longer apply.
- EU aspects
- VAT is a fundamental part of the European Union EU.
- UK were obliged to adopt VAT as terms of joining in the European Union EU in 1973.
- Operating within parameters set by EU VAT directives.
- Interpreted by Court of Justice of the European Union CJEU
- After Brexit
- Although outside the parameters set by EU VAT directives, UK is unlikely to discontinue VAT because it is a widely adopted tax in the wider international community - about 160 other countries.
- Keeping the VAT system is part of Government policy.
- UK may break loose of minimum and maximum VAT rates set by EU.
- UK may may change the compulsory VAT registration threshold
- The UK compulsory VAT registration threshold of £85,000 is scheduled for review April 2022.
- Interpretation will be with UK’s Courts but it will be normal legal practice for UK judges to take account of the Court of Justice of the European Union CJEU’s, and it’s predecessor’s, decisions which have evolved over 47 years.
- Subject to UK-EU negotiations
- VAT may be payable to HM Revenue & Customs when goods are imported to UK from the 27 EU counties.
- VAT may be payable by EU buyers when goods are exported to the 27 EU counties from UK.
- UK Government proposal to defer import VAT from the date of import to the date of the VAT return.
- This method of VAT on import is proposed for all countries not just EU.
- UK is proposing that EU adopt the same procedure with UK.
- Alternatively UK exporters to EU may need to appoint import agents in the EU countries.
