In the follow up to his 'Brexit VAT myths' article, Neil Warren shares five important VAT facts about Brexit.
Last time in the Brace for Brexit series, we tackled five VAT myths and rumours that have gathered momentum since the UK left the EU.
In contrast, in this article we will explore five VAT facts about Brexit.
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Neil Warren is an independent VAT consultant and author who worked for Customs and Excise for 14 years until 1997.
Really good brief summary.
Timely as I have a B2C person coming in later today
If B2C sales are made UK to EU for a value over €150 so not eligible for IOSS what is the way forward in that case?
For over €150, the main options are GB zero rated sale and customer picks up the import VAT/duty at their end or GB business registers for VAT in Country of customer/destination.
Remember, before Brexit you would have either charged UK VAT to the EU consumer or if you had gone over the distance selling threshold, you would have been VAT registered in the customers Country. My point being is that the customer had to pay VAT either way - either UK or local to them - whereas now your sale is zero rated and so 20% cheaper than last year at point of sale, yes customer has to go to their local post office to pay a fee/pick up their parcel but they are not necessarily out of pocket, but they are at an inconvenience having to go and pick up their parcel.
*I'm just trying to put a bit of marketing spin on things on what in reality is now a complicated issue thanks to brexit.
Great article Neil
Just one observation, more so to clarify a particular point to the uninitiated.
Fact 2 - B2C exports to EU - you say "A shipment of goods from GB to any country outside the UK is an export".
Worth pointing out that this is only viewed as an export & z/rate where it is a 'direct' export (i.e. seller arranging shipping). B2C 'indirect' exports where buyer handles or arranges the shipping no longer qualifies as a zero rate export - to anywhere in the world, not just EU