Q&As

Will the VAT Directive still be relevant for UK taxpayers once the Brexit implementation period is over?

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Published on LexisPSL on 23/03/2020

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

  • Will the VAT Directive still be relevant for UK taxpayers once the Brexit implementation period is over?
  • The position prior to Brexit
  • The Brexit implementation period
  • After the Brexit implementation period

In order to answer this question it is necessary to understand the effect of the VAT Directive in UK law prior to Brexit, before going on to consider the position during and after the Brexit implementation period.

The position prior to Brexit

Member States of the EU (which, prior to Brexit, included the UK) are under an obligation to transpose EU Directives into national law. In the UK, this obligation was recognised in section 2(1) of the European Communities Act 1972 (ECA 1972) which expressly required all UK authorities to give effect to the powers, obligations, liabilities, remedies and procedures which are provided for by EU law. For more information, see Practice Note: Obligation to transpose and process EU Directives.

If an EU Member State fails to correctly transpose a provision of a Directive into national law, and if certain conditions are met, the Directive can have direct effect. There are different types of direct effect, but for Directives the relevant type is vertical direct effect, meaning that citizens can enforce a provision against the state, and can do so directly in their national courts (see Practice Note: Direct effect of EU law).

Even if these conditions are not met, such that the Directive does not have direct effect, courts are still obliged to construe domestic legislation in accordance with EU law, if the domestic legislation is

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