Preparing for Brexit
At the time of writing, the UK is on track to leave the EU on 12 April 2019, which means UK-based businesses will no longer be located in an EU country. This will have implications for paying and reclaiming VAT across the UK’s borders.
EU VAT refunds
Where you paid VAT on business expenses incurred in another EU country during 2018, you would normally have until 30 September 2019 to reclaim that VAT. HMRC is urging all UK businesses to submit refund claims for EU VAT before 12 April 2019. After that date any VAT refund claims from UK businesses may have to be submitted directly to the tax authority of the country where the expense was incurred, rather than through HMRC’s online portal.
Many small businesses found they could deregister from the VAT MOSS system from 1 January 2019, as their sales of digital services to customers in other EU countries fell within the new de-minimise threshold of £8,188.
However, that threshold does not apply for businesses based outside the EU, so all micro-businesses that continue to make cross-border digital sales to nonbusiness customers in the EU will have to re-register for VAT MOSS in an EU country (i.e. not the UK) by 10 May 2019.
This also applies to businesses who remained within VAT MOSS as their annual sales are more than £8,188. Those UK businesses will have their VAT MOSS registrations automatically cancelled from 1 May 2019, and they will have to re-register for VAT MOSS purposes in an EU country by 10 May 2019. It is easiest to do this in Eire or Malta, as the forms are in English.
The VAT MOSS return and payment for the period to 31 March 2019 has to be submitted by 20 April 2019. HMRC’s online VAT MOSS portal will remain open until 15 May 2019 to make and amend this return.