May 7th, 2019.

Businesses which import or export goods will be aware of the difficulties that leaving the EU
with no withdrawal agreement in place will cause them. Other businesses will also be affected by immediate changes to the VAT system.

Anyone paying VAT on business expenses in another EU country during 2018 would normally have until 30th September 2019 to reclaim that VAT. However, HMRC has urged all UK businesses to submit refund claims for EU VAT before the UK leaves the EU as, after that date, any refund claims from UK businesses will have to be submitted directly to the tax authority of the country where the expense was incurred, rather than to HMRC.

As of 1st January 2019, businesses with annual sales below £8,188 (€10,000) of digital services to non-business customers in other EU countries no longer have to report those sales and pay VAT under the VAT MOSS rules. However, this de minimis turnover threshold does not apply to non-EU businesses, which will be the position of UK businesses after the UK leaves the EU.

If your business continues to make sales of digital services to non-business customers in EU countries after the UK leaves the EU, you will have to re-register for VAT MOSS as a non-EU business in an EU country (ie, not the UK). This also applies if you did not de-register from VAT MOSS in January, as your VAT MOSS registration will automatically be cancelled when the UK leaves the EU.

VAT MOSS, which stands for Value Added Tax: Mini One Stop Shop) is a way of paying VAT if your business supplies certain digital services to other EU countries. It was introduced so that UK sellers could simply pay VAT to HMRC, instead of having to register for VAT in every EU country.