Will UK-based businesses have to charge VAT to European countries when exporting to the EU after Brexit?


We don’t know what the trade agreement will be between the UK and the EU27, but VAT is a domestic tax so it is unlikely that it will become chargeable on exports to EU Member States. Currently, the VAT scheme for sales within the EU countries comes under acquisition VAT conditions, also sometimes known as destination accounting. Under the current system, UK suppliers of goods to another EU Member State must get their customers’ VAT numbers, quote this on the invoice and obtain evidence that the goods have physically moved out of the UK, then VAT is not charged. The value of sales within the EU must be declared on the monthly EC Sales List (ESL) and monthly or quarterly on VAT returns.

Once the UK is outside of the EU for trade purposes, the normal system of VAT zero rating will be applicable. In other words, as long as you have evidence that your goods leave the UK you will not have to charge VAT, you will not have to obtain evidence that your EU27 customer is VAT registered and you will not have to make additional declarations on the ESL or VAT return.

Source – Croners Wolters Kluwer Business

For further information please contact Stephanie Warrington on 01254 356473 or s.warrington@chamberelancs.co.uk