It’s important for businesses outside of the UK (mainly those in Europe) to note the VAT changes of the sale of goods to customers that will come into effect post the Brexit transition period. This article highlights the coming changes and details what non-resident businesses can do to prepare for these changes.
From 1 January 2021, there will be significant changes to VAT accounting by non-UK established sellers who sell goods to UK businesses and consumers directly and using Online Market Places (OMPs) that “facilitate” sales of goods.
Improved VAT Compliance
Quite like the EU with their EU VAT Package, the UK is also creating guidelines to streamline and improve VAT compliance by imposing collection and payment responsibilities onto the OMPs that facilitate sales. The objective is even the playing field across the continent.
How can your business prepare for the coming VAT changes post Brexit
The below outlines steps a business can take to ensure that they are ready for the above changes and avoid non-compliance pitfalls and possible penalties.
Businesses should look to completing their VAT registrations sooner rather than later as there will most likely be an influx of late applications and HMRC delays. Any non-UK businesses who need to register for VAT in the UK are advised to act now as late registrations ultimately lead to penalties.
With regards to importing goods into the UK, it’s important to note that the owner of the goods at the time of importation is eligible to reclaim the import VAT. That means that businesses should make sure that their supply chains and delivery logistic solutions are structured efficiently for tax purposes.
Disclaimer: Reproduced/Adapted with permission from VATGlobal.