Brexit - Filing your form VAT 100 Value Added Tax Return
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.
VAT can be really difficult and each trader needs to become an expert in his or her own trade. I hope that we can help you through the changes.
VAT 27 EU member list and VAT rates
VAT 27 member list in the European Union EU
- Inside EC - Treated in the standard way for EC imports and exports.
|Ref - Country||Standard VAT rate
Other rates apply by specific category
Full EU VAT details 137 pages
|- and Monaco||20%||Euro|
|- and San Marino||0% - 17% Monofase tax applies to imports||Euro|
Current VAT return boxes (VAT100) are:
|VAT Box||VAT Return description||Our notes||£|
|(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
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:||£|
|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.
- Online traders selling to the 27 EU countries
- Pending clarification we are suggesting that, for the sake of continuity of your business, you continue, as before, but change your documentation to show the local country VAT addition from 01/01/2021. I guess this will often be 20% approximately.
- It is a point of negotiation whether EU will be willing to accept UK HM Revenue & Customs as an agent for collecting their tax.
- As long as you have collected the VAT and are ready to remit it to the appropriate country this should not be a problem.
- Bearing in mind that you will not have to account for VAT until February 2021 or later there should be time to set up the appropriate framework.
- If you supply to EU digitally
- If you supply to EU digitally there should still be the Non-Union VAT Mini One Stop Shop MOSS in which you register in one EU country and prepare a quarterly return in that one country for all of the EU members. The Republic of Ireland Éira may be a good choice for UK traders.
- UK guidance is at:
Non-Union VAT Mini One Stop Shop MOSS
about what is covered by MOSS
HM Revenue & Customs examples of What Is and What Is Not covered by Non-Union VAT Mini One Stop Shop MOSS
E-service - Electronically supplied - Part of MOSS
PDF document automatically emailed by seller’s system.
PDF document automatically downloaded from site.
Stock photographs available for automatic download.
Online course consisting of pre-recorded videos and downloadable PDFs.
Link to online content or download sent by manual email.
Not an e-service - Not part of MOSS
E-service - Not electronically supplied - Not part of MOSS
PDF document manually emailed by seller.
Online course consisting of pre-recorded videos and downloadable PDFs plus support from a live tutor.
Individually commissioned content sent in digital form, for example, photographs, reports, medical results.