November 30, 2020
If you own a business in the UK and sell your goods or services internationally, the upcoming conclusion of the Brexit transition period will likely affect your operations. To assist you in preparing for the changes that will take place on January 1, 2021, 1StopVAT team has created a checklist of essential action items for sellers in the UK.
If you have been using the Union MOSS system for simplified VAT accounting in the EU, you should switch to the non-Union MOSS by registering in one of the EU member states. Similar changes apply for foreign businesses that have used non-Union MOSS with the UK registration.
Companies currently taking benefit of the EU distance selling simplification should prepare for upcoming adjustments due to termination of the program for the UK businesses. At the same, foreign sellers operating in the UK should prepare for new VAT rules for imports up to £135.
As of January 1 2021, companies from the UK will be required to have fiscal representatives if operating in some of the EU countries. In total, 19 of 27 member states of the EU entails foreign businesses to hire local agents that are held responsible for correct VAT reporting and communication with the local tax authority. Countries that call for fiscal representation include Belgium, Germany, Italy, Sweden, and others.
Companies undertaking EU customs procedures must ensure they have an EU EORI number ready for the end of the Brexit transition period. From January 1 2021, sellers from the UK will have to comply with customs requirements of the EU member countries and prepare for filling in export declarations as well as full customs declarations on goods like alcohol, tobacco, military goods, etc.
Postponed import VAT accounting will be available for companies in the UK importing non-controlled goods from the EU. Between January 1 and June 30 2021, importers can declare goods in their own records without getting authorization in advance and delay accounting for the goods to the HMRC by up to 6 months on a supplementary declaration.
From January 1, 2021, a number of taxation amendments will be applied to exported goods. UK sellers will be obliged to make customs declarations when exporting goods to the EU or trust couriers, freight forwarders or customs agents to do that. From the same date, companies from the UK will be enabled to charge 0% rate VAT on most goods exported to the UK.
If you have any questions of how Brexit will affect your business, reach out to 1StopVAT team for a professional consultation.