Changes to the way you pay or reclaim VAT if the UK leaves EU-wide VAT IT systems.
In the event that the UK leaves the EU without a deal, from 11pm GMT on 29 March 2019, many UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world.
The actions set out in this guidance do not apply to importing or exporting goods between Northern Ireland-Ireland. We will write to you with information about this as soon as we can.
The rules and processes for VAT IT systems will change. This guidance is for businesses that:
- claim VAT refunds from EU countries
- need to check the validity of UK VAT registration numbers
- report sales of digital services to consumers in the EU using the UK VAT Mini One Stop Shop
- are under the VAT digital services threshold and make sales of digital services to consumers in the EU
HMRC will update this guidance when further details are available.
Claiming EU VAT refunds
If you want to use the EU VAT refund electronic system to submit a refund claim for 2018 you’ll need to do so by 5pm on 29 March 2019. If claims are submitted after that, HMRC will not be able to send your claim on to the relevant EU member state.
If you’ve paid VAT in an EU member state in 2019 you should not use the EU VAT refund system to make your claim as it may be rejected by that member state.
After 29 March, you must claim VAT refunds from EU member states by using the relevant member state’s existing process for businesses based outside the EU. This includes outstanding claims that relate to 2018 expenses, and claims relating to 2019.
It’s important you understand the process for each EU member state you deal with as it can vary. For example:
- the deadline for making your claim may be different
- you may need to supply a certificate of taxable status to support your claim
- you may need to appoint a tax representative in the EU member state of refund
Check the EU’s Europa website for country specific information on VAT.
You’ll still be able use the EU VAT refund system to view claims made before 29 March 2019.
Checking a VAT number
If you need to make sure a business is VAT registered as part of your due diligence checks, you:
- will be able to check UK-only VAT registration numbers on GOV.UK - this will be available from 30 March
- can continue to use the EU’s VAT number validation service to check the validity of EU VAT registration numbers
Using the UK’s VAT Mini One Stop Shop
Businesses can use the UK’s VAT Mini One Stop Shop (MOSS) to declare sales of digital services to consumers in the EU. You should continue to use the UK’s MOSS portal in the normal way to submit and pay your return for the first quarter of 2019. This return should include supplies made between 1 Jan 2019 and 11pm on 29 March 2019 (the quarter 1 2019 return). The normal submission deadline of 20 April 2019 will apply.
However, you will not be able to use the UK’s MOSS portal to declare VAT on sales of digital services to UK and EU consumers that are made after the UK leaves the EU. If you wish to continue to use MOSS after the UK leaves the EU you will need to register for MOSS in an EU member state. You should do this by 10 April 2019.
To allow you to do this, you will be automatically deregistered from the UK MOSS system with effect from 1 April 2019. You will still be able to access the system after you have been deregistered to:
- submit your return for the first quarter of 2019
- view your previously submitted returns, however, any amendments to these returns must be made directly with the EU member state concerned and not via the MOSS system
- submit outstanding pre-2019 returns and amend previously submitted returns until 11pm on 29 March 2019
- amend your quarter 1 2019 return and update your registration details until 15 May 2019
Sales of digital services in the EU and UK after 29 March 2019
UK businesses currently using the UK VAT MOSS Union scheme can continue to use the MOSS system but must register for the VAT MOSS non-Union scheme in an EU member state.
If you want to continue to use MOSS, you must register for the scheme by the 10th day of the month following your first sale after the UK leaves the EU. For example, register by 10 April 2019 if you make a sale between 29 and 31 March.
UK businesses will only be able to register after 29 March 2019.
Alternatively, you can register in each EU Member State where you make sales. Check the EU’s Europa website for further information about registering for VAT in EU member states.
Non-UK businesses currently using UK VAT MOSS non-Union scheme will need to register for the scheme in an EU member state.
Non-UK businesses will need to declare sales of digital services to UK consumers by registering for VAT in the UK and declaring the sales via a UK VAT return.
Digital services threshold
When the UK leaves the EU, all supplies of digital services to consumers in EU member states become liable for VAT in the consumer’s member state. The £8,818 annual threshold for cross borders sales of digital services to EU consumers will no longer apply.
You will have to charge VAT at the rate where your customer is based and declare those sales to the relevant EU member state.
To declare the VAT charge, you can register for VAT in each EU member state where sales are made or register for the VAT MOSS non-Union scheme in an EU member state of your choice.