Brexit VAT Return Changes

The Tax Kit: April 2021.

Photo by Pat Whelen on Unsplash

The implementation of Brexit means that from 1st January 2021 controls have been in place on the movement of goods and services between the UK and the EU. This means that the VAT treatment of imported and exported goods with European countries will now be the same as with Non-EU countries (i.e. the rest of the world).

Changes relating to Brexit are required for all VAT Returns submitted after 8th April 2021. Brexit rules will continue to develop over the coming months.

For many, there will be no or minimal change relating to Brexit itself to their VAT Returns. Though many may be impacted if they import goods (including now from the EU) and choose to use Postponed VAT Accounting. 

Nothing will change in the mechanics of how you submit your VAT return itself, that will be the same as before. However, there are changes to what numbers should be entered into some boxes on the VAT Return, should you be affected by the following:

  1. You will need to submit different figures in relation to EU trading (i.e. Boxes 2, 4, 8 & 9).
  2. There are also new rules required with the introduction of Postponed VAT Accounting for all Imports (i.e. imports from EU and the rest of the world) relating to Boxes 1, 4 & 7.

1) EU trading figures submitted in the VAT Return (i.e. Boxes 2, 4, 8 & 9)

www.freeworldmaps.net

Changes are required to the VAT Return due to Brexit and the Northern Ireland Protocol (i.e. trade with the EU via Northern Ireland).

As far as the VAT Return is concerned, the old EU reporting in Boxes 2, 4, 8 & 9 no longer applies. From now, on only trade to and from the EU via Northern Ireland needs to be disclosed in Boxes 2, 4, 8 & 9 in relation to the EU.

2) VAT on Imports (including from the EU) & Postponed VAT Accounting 

Photo by Martin Sanchez on Unsplash

There are additional changes to the VAT Return relating to the VAT on imports and the introduction of Postponed VAT Accounting for VAT on imports (from EU & the rest of the world) relating to Boxes 1, 4 & 7.

If you import goods into the UK from any other country in the world, you are most likely to have to pay import VAT on the goods. Following Brexit, this also now applies to goods imported from the EU. This import VAT is payable on entry to the UK, you may also need to pay import duty.

Please review other blogs in this series for additional information.

Note

VAT, duty and customs rules are complex. This note is a brief introduction to help your VAT Return submission relating to the new Brexit changes and is not a full explanation. Links to some HMRC guidance has been included for further information. Obtain advice on your own specific circumstances and check whether any relevant rules have changed. Brexit rules will continue to develop over the coming months. Please review HMRC guidance for future changes.

Media Credits:

Fig 1. Stack of shipping containers by Pat Whelen on Unsplash

Fig 2. Northern Ireland Map by www.freeworldmaps.net

Fig 3. World Map by Martin Sanchez on Unsplash

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