UK - Brexit - 31 January 2020 

Businesses have to be ready for a no deal Brexit therefore we have outlined possible post Brexit situations that will help you understand where your business will be standing if the UK leaves the EU with no agreement and what to do.

UK business trading with the EU

UK selling goods to EU (B2C)

  • UK - Goods are zero rated in the UK.

  • EU - For goods up to the local Low Value Consignment Relief (LVCR) in the country of destination, no VAT is due. For goods exceed the LVCR for VAT has to be paid by the consumer.

UK exporting goods to EU (B2B)

  • UK (export) - Export of goods are zero rated. No more EC Sale Lists is requires but evidence of export must be retained.

  • EU (import) - Associated Import VAT and Customs Duties due when the goods arrive into the EU. Fiscal Representation required in certain countries.

UK business may require a EU/UK EORI number

VAT registration is required in EU countries as distance selling arrangements will no longer apply. Fiscal Representation may be required in certain EU countries. When moving goods, export are zero rated and EC Sales Listing no longer applies for UK businesses; and import are subject to Import Vat and Import Duties. For UK sellers sending goods to the EU, LVCR continues to apply. UK businesses are likely to apply for a EU/UK EORI number.

Global VAT Compliance will make sure your VAT registrations will be a smooth and efficient process and we will act as your Fiscal Representative wherever needed. Our in-depth knowledge and experience ensures your VAT reporting is always accurate and timely; taking into consideration all new requirements and rules. In addition, we will correctly handle your export and import VAT position when moving goods to other countries to avoid possible penalties and customs delays. Global VAT Compliance can ensure you are VAT compliant and fully prepared for Brexit.


EU trading with the UK

For UK business

  • UK to EU - Treated as an Export. Zero rate. No EC Sales Listing required anymore.

  • EU to UK - Treated as an Import. Import VAT and custom duties in the UK. VAT registration required in country of storage of goods.

For EU business

  • EU to UK - Treated as an Export. Zero rate.

  • UK to EU - Treated as an Import. Import VAT and custom duties in Member State of destination/importation. VAT registration required in country of storage of goods.


Suppliers of Digital Services with a VAT MOSS registration

  • UK business will need to register under the non-EU VAT MOSS scheme in an E27 member state

  • EU business will need to VAT register in the UK for to report VAT on digital services in the UK

  • Non-EU business with UK VAT MOSS registration and any other EU establishment will need to moved their VAT MOSS to an E27

  • Non-EU business with only UK establishment will need to register under the non-EU VAT MOSS scheme in an E27 member state

What do we offer?

To be ready in time and Key Group offers an End-2End solution from a VAT compliance impact perspective to amending the new VAT in the determination logic of SAP or installs SAP add-ons when preferred.


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Take aways 

Anticipate what users would want

We combine technical knowledge with industry understanding and knowhow of technologically advanced tools and methodologies available in the market or developed by ourselves.

What do we like to achieve

  • Focus on tax processes that could be improved
    • Manual process: same data requests are made by different stakeholders
  • As Is assessment
  • Anticipate future changes and the data needed
    • What are tax trends?
    • What is happening locally and what should be considered across jurisdictions where you operate?
    • Anticipate new stakeholders and their data needs or requests (internal and external)
  • Define scope and actions for short, mid and long term
  • Write business case for change
  • Realize sponsorship for implementation

‘As is’ assessment, actions and business case

  • What tax data is requested and by whom?
  • What tax process can be improved and what can be automated?
    • CIT, VAT, tax data warehouse
  • What is the Return on Investment?
    • Hard saving: process improvement
    • Meeting (new) tax requirement
  • What systems are in use: SAP, Oracle, etc
    • By which entities?
  • How many end-use computing tools (e.g. excel spreadsheet) do we have?
  • How do we avoid an ad-hoc solution?
    • Understand the bigger picture
    • Real problem and not the symptom

Risk and reward

Technology-related tax risk: understand and address the potential harms and benefits of (new) technology.

Technology tools & systems integration

Ascertaining proper IT support for ensuring efficient, timely and reliable reporting.

Change and project management

VAT should be considered in every aspect of the process, from concept through completion and beyond. Managing by design — looking at any process or transaction from end to end and factoring in all the requirements and controls essential to designing and optimizing a compliant VAT process.

Effective communication and teaming

We speak the language of the business and IT and no translation is needed.

Set up a project plan

  • Set up a project charter that will take effect preferable during feasibility but ultimately during design
  • Write a business case and problem statement
  • Define scope of the project
  • Define objectives and goals of the project
  • Involve stakeholders and define priorities
  • Set measurable milestones
  • Ensure that the right sponsors provide buy-in.
  • Identify (project) risks and how to manage them
  • Jointly validate and refine the project plan and develop a roadmap to success
  • Hold regular meeting to track progress of the various work streams