Government publishes no-deal VAT guide for businesses

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The Government has released a document intended to advise businesses about potential changes to VAT regulations should no agreement be made between the UK and the EU. The documents details areas such as vehicle imports and the EU Tour Operators’ Margin Scheme

As the Government prepares for the possibility of a no-deal Brexit, it has published a document intended to advise businesses about what to do in the event of no agreement being reached.

The document suggests that the Government’s aim will be to keep VAT procedures as similar to existing procedures as possible.

However, as expected, if the UK does leave the EU with no agreement, then there will be changes to VAT procedures.

The document highlights the VAT changes that businesses will need to prepare for when importing goods from the EU, exporting goods to the EU, supplying services to the EU, and interacting with EU VAT IT systems, such as the VAT Mini One Stop Shop (MOSS).

Importing and VAT
The Government has stated that in the event of a no-deal it will ‘introduce postponed accounting for import VAT on goods brought into the UK.’

This will allow UK VAT registered businesses importing goods to the UK to account for import VAT on their VAT return. This applies to imports from the EU and non-EU countries.

VAT on vehicles imported into the UK
The document advises that if no agreement is reached, businesses should continue to notify HMRC about vehicles brought into the UK from abroad as they currently do.

The Notification of Vehicle Arrival Procedures (NOVA) system should continue to be used for this purpose.

It states: ‘The DVLA will not register a vehicle brought into the UK for use on UK roads unless it has a valid NOVA notification or has been registered using the DVLA secure registration scheme.’

As a result of changes to the rules governing movement of goods, import VAT will be due on vehicles brought into the UK from EU member states.

Certain reliefs will be available, as with current imports of vehicles from non-EU countries, and businesses must continue to use NOVA to verify that VAT is correctly paid on imported vehicles.

EU Tour Operators’ Margin Scheme
The Tour Operators Margin Scheme is an EU VAT accounting scheme for businesses that buy and sell certain travel services that take place in the EU.

Regarding changes to the scheme, the document states: ‘HMRC has been engaging with the travel industry and will continue to work with businesses to minimise any impact.’

EU VAT refund system
In the event of no agreement being reached, UK businesses will still be able to claim refunds of VAT from EU member states, but in future will need to use the existing processes for non-EU businesses.

UK business will no longer have access to the EU VAT refund system, but they will continue to be able to claim refunds of VAT from EU member states by using the existing processes for non-EU businesses.

This process varies across the EU and businesses must make themselves aware of the processes in the individual countries where they incur costs and want to claim a refund.

For further details or clarification, the full document is available from: