Q&As

What considerations arise in relation to VAT on the cross-border supply of goods and services between GB, NI and the EU from 1 January 2021?

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Published on LexisPSL on 26/01/2021

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • What considerations arise in relation to VAT on the cross-border supply of goods and services between GB, NI and the EU from 1 January 2021?
  • VAT—cross-border goods and services
  • Goods—GB
  • Goods—NI
  • Services—UK

VAT—cross-border goods and services

The Taxation (Cross-border Trade) Act 2018 makes provision for the UK to cease being a Member State of the EU and its customs union.

However, the Northern Ireland (NI) Protocol to the Withdrawal Agreement provides that NI remains subject to EU VAT rules after IP completion day in relation to the supply of goods. As such, there are three discrete VAT regimes to consider, namely:

  1. the supply of goods between GB and the EU

  2. the supply of goods between NI and either the EU or GB

  3. the supply of services between the UK and the EU

Goods—GB

Key points for practitioners to consider in respect of the VAT treatment of the supplies of cross-border goods involving GB from IP completion day include:

  1. VAT is imposed on imports of goods from the EU to GB and no UK VAT is charged on exports of goods from GB to the EU (ie the same position as with non-EU countries)—acquisitions and dispatches are abolished

  2. however, import VAT is not due on consignments of goods that are outside the UK, are imported in consignments of £135 or less in value and are sold directly to customers in GB (albeit not through an online marketplace, for which see below). Instead, the seller is required to charge and collect UK VAT due at the time of sale

  3. the extension of

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