Brexit is coming, are your clients ready?

As we all know the time frame for leaving the EU remains 31 October 2019, only a few weeks away from publishing this article, and despite the current wrangling’s in the UK Parliament the reality is that if the EU simply say ‘no’ to any further delay we will leave the EU on 31 October 2019, with or without a deal.

What is clear is that if it happens and we leave without a deal the process of trading with the EU will change for businesses in the UK.

It is therefore imperative that businesses that trade with the EU prepare for that eventuality if they have not already done so.

In recent weeks HMRC have issued various pages of guidance on how a no deal Brexit would affect VAT related processes for UK businesses trading with the EU and what those business need to do to ensure that they continue to be able to trade with the EU after a no deal Brexit.       

This article brings these together in one place.

Sale of Goods to EU

Sales of goods to both business and non-business customers will become exports and will therefore be zero-rated subject to the existing rules regarding export evidence (see Goods exported from the UK VAT Notice 703 –

To apply the relevant Customs procedures any business exporting goods from the UK will require an Economic Operators Registration and Identification (EORI) number 

HMRC’s guidance on obtaining an EORI is at the following link:

Imports of Goods from the EU

Bringing goods into the UK from the EU will become an import and again to comply with UK Customs requirements the importing business will require an EORI; see above.

Goods coming in from the EU will therefore become subject to Import VAT and duty charges that they would not previously been subject to.

In an attempt to assist businesses cash flow the Government and HMRC will change the way Import VAT is charged to and claimed by VAT registered businesses, introducing a ‘Reverse Charge’ style procedure declared on the VAT return. This will mean that an importer will no longer pay the import VAT to Customs at the time the goods enter the country and then claims it back on their VAT return at a later date but instead declare the Import VAT on their VAT return and claim it back on the same return. This will be the case for ALL imports, not just those from the EU. 

HMRC’s guidance on these changes is provided in the following links:

Check when you’ll need to account for import VAT in a no-deal Brexit (

Complete your VAT Return to account for import VAT in a no-deal Brexit (


Businesses that sell digital services to non-business customers in the EU currently access VATMOSS via their HMRC gateway, but this access will cease.

In order to have access to and continue to use VATMOSS a business will have to register for VAT in 1 other EU Member State and then register for Non-Union VATMOSS in that Member State. However, this can only be done within certain time frames.

HMRC’s guidance on doing this and when businesses need to do this is provided in the following link:

Pay VAT when you sell digital services to EU customers after Brexit (

If a business that sell digital services to non-business customers in the EU does register for Non-Union VATMOSS, they will become liable to register for VAT in EVERY Member State in which their non-business digital service customers belong.

Claiming VAT incurred in EU Member States using the EU Refund Scheme

UK businesses can make claims for VAT incurred in other EU Member States using the EU Refund Scheme which, at present, can be made electronically through the HMRC gateway.

However, the facility to make claims electronically is not available to businesses in countries outside the EU which will mean UK businesses will no longer be able to make their claims via their HMRC gateway.

Each individual country in the EU has their own rules on how and when EU Refund Claims must be made by businesses based outside the EU; these range from the claim having to be made in hard-copy in the country’s native language and with all original copy invoices and receipts being sent with the claim, to the claim only being acceptable if made by an appointed represented based in the country to which the claim is made.

HMRC’s brief guidance on UK businesses making such claims after Brexit is provided at the following link, although it simple refers the reader to the EU Commission website for guidance related to each EU Member State:

Claim VAT refunds from EU countries after Brexit (


Related News Articles

CIS changes

HMRC announced they were making some minor changes to the CIS scheme from 6 April 2024, in that VAT failures are now counted when looking at whether a firm qualifies for gross payment status. In line with other taxes, minor failures will not count towards gross payment disqualification. “Minor failures” are: 3 late submissions of…

Navigating Tax Changes: High-Income Child Benefit Charge and Other Updates 

THE HIGH-INCOME CHILD BENEFIT CHARGE In an effort to reduce unfairness, the thresholds for the high-income child benefit charge (HICBC) will be increased from 2024/25. You may have to pay the HICBC if you are considered to have ‘high income’ and child benefit is being paid in relation to a child that lives with you,…

CIOT Responds to HMRC Regarding the Current Problems with R&D Tax Relief

In the summer of 2023, HMRC and the Chartered Institute of Taxation (CIOT) exchanged lengthy correspondence about the approach being taken by HMRC relating to R&D tax relief claim compliance checks. The CIOT expressed concern about a number of tactics being employed; HMRC’s response was to largely defend the measures being undertaken. Several months have…