Brexit. VAT rules for trading goods with the EU – Post Brexit (updated)

The new vat rules for businesses trading with the EU

You may have been burying your head in the sand until now, with Covid being the demon to deal with first. However there is no more putting it off, the withdrawal transition period from the EU has ended, Brexit has completed and the post Brexit rules are in place.

To let you know what you now need to do now if you are buying or selling services cross border with the EU, we’ve prepared a simple guide below to the new rules for VAT from 1 January 2021:

Buying goods from the EU

• Customs declarations required
• Import VAT payable on entry to the UK by purchaser if parcel worth over £135 (excluding VAT)
• Import VAT payable by supplier if parcel worth less than £135 (excluding VAT)
• You will need an EORI number that starts with GB
• No longer classed as EU acquisitions, these goods are imports, EC Sales Lists and Intrastat Declarations not required
• Postponed VAT accounting may be an option to pay import VAT on VAT returns

Selling goods to the EU

• Customs declarations required
• Charge VAT at 0% on most goods you export to the EU (where proof of export and export conditions met)
• You will need an EORI number that starts with GB
• Customer will need to make EU import declarations
• If EU customer not VAT registered, supplier will likely need to register for VAT in the EU member state of destination and account for EU VAT. Distance selling rules no longer apply.
• No longer classed as EU despatches, these goods are exports, EC Sales Lists and Intrastat Declarations not required
• If you zero-rate any sales for whatever reason, you should always keep proof that the goods have been exported as part of your VAT records to avoid HMRC imposing a 20% VAT charge on you.

Northern Ireland

• No customs declarations on goods entering Great Britain from Northern Ireland
• Digital import declarations for goods entering Northern Ireland (Trader Support Service)
• No import VAT payable on goods moving between Great Britain and Northern Ireland
• You will need an EORI number that starts with XI

Please contact us if you have any queries in connection with the movement of goods.

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