VAT Implications to the Supply of Services after Brexit.

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How has Brexit affected the supply of services?

Since Brexit the transition period, the VAT rules for the supply of services have changed.

Whilst not as complicated as the rules on the supply of good, they still represent a significant change from the past.

The rules applied are dependant on deciding where the supply takes place.

Supplying B2B businesses outside the UK.

The general VAT rules for business-to-business (B2B) supplies is that it takes place, for VAT purposes, in the country of the customer. These supplies are outside of UK VAT, and so should be zero-rated.

When providing these services, you need evidence that the customer is based outside of the UK, an example of this evidence is a valid VAT number from their country.

However, for some supplies, for example some services relating to UK land, the supply is deemed as being in the UK, and therefore VAT must be charged.

If you don’t have sufficient evidence that the customer is a business in that country, then you must treat the supply as business-to-customer (B2C) 

Supplying B2C businesses outside the UK

If you supply non-business customers (B2C) then these supplies are deemed to take place in the UK, and as such should be subject to the appropriate rate of VAT.

Certain special rules apply for some B2C supplies, for example where product are supplied electronically. Under these circumstances the supply happens where the customer is.

In these special circumstances, if the customer is in the EU you may have to register for VAT in their country and charge foreign VAT.

Kind regards Ilyas

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