The recent adoption of Brexit has significantly changed our business landscape here in the UK. Since 31st January 2020 we as a nation have had a firm knowledge of the acceptance of Brexit, soon followed by an 11-month long transition period.

Yet, since indefinitely leaving the EU, and in turn, the end of the transition period which happened on 31st December 2020, confusion around the business after Brexit is still rife.

VAT is a complex taxing process to comprehend as a standard, never mind on a post-Brexit landscape, placing confusion as a reasonable feeling to experience. However, as business owners, accountability is high around taxing responsibilities, falling under the umbrella of accountancy.

Even if you have your own accountant to manage your books and financial forecasts, it is important that you understand how Brexit has and will continue to impact VAT for UK businesses. Here’s some insight into the business after Brexit – How VAT will change. If you require further information around VAT or guidance with your accounting, we at The Financial Management Centre are here for you.

Business after Brexit – How VAT will change for the future

Down to leaving the European Union, the previous EU VAT regime and the regulations and details of the Single Market no longer stand. As a result of this, VAT has changed for business after Brexit, which we’re currently in the midst of.

We’ve seen significant adaptations across the ways of doing business moving forward, including customs, including importing and exporting plans, including the formation of supply chains, and including the capacities to travel.

Within those adaptations, we’re sure you’re wondering how VAT will change for the future. Here’s how for business after Brexit.

VAT after Brexit

  • The UK will have full control over reduced VAT rates, opting for a rate which will benefit UK businesses.
  • Prior to Brexit, being a part of the EU meant that cohesive rules and regulations surrounding VAT upheld for the UK. By exiting, accountability is now present for the UK, with the opportunity to adapt VAT directive rules and rates.
  • Postponed VAT accounting is now available for UK businesses, where VAT can be accounted for through returns, benefiting business cash flow. This has been the case since January 2021 yet isn’t a requirement for those businesses who look to continue to account for VAT through each import/export.
  • Moving goods between the UK and the EU will now require two EORI numbers. Without fulfilling this, importing/exporting will be impossible.
  • Those with EU VAT responsibilities will now need to appoint a VAT fiscal representative, to hold guarantee over the payment and liabilities of VAT.
  • E-commerce sellers, under a £70,000 threshold will need to register for EU VAT if they hope to continue business outside of the UK. This will also be the case for EU businesses when exporting into the UK, where registering for UK VAT responsibilities should be your next steps.
  • Custom declarations will still remain when exporting and importing goods. Yet separate declarations are now required for each transaction.

When considering differing industries, processes and supply chains, VAT changes will impact your business differently to the next. For example, B2B and B2C changes are different as the result of Brexit, which may or may not result in adaptations for your business.

As VAT is a complex topic, and where industry-specific changes have been made, if you require insight into your liabilities, contact our team today.

FAQs around business and VAT after Brexit

Below are some frequently asked questions around business after Brexit – How VAT will change, which we’ve received here at The Financial Management Centre. If you have any personal questions in relation to your business activity and accountancy, we can provide confidential guidance.

What changes have been made within custom duties?

If goods are moving in between the UK and an EU country, where the origins of those goods are from the EU, custom duties to this date still apply for UK businesses. However, if items originate outside of the EU, yet are still being imported/exported from the EU, greater focus must be placed on the UK’s agreement surrounding customs with the origin country.

One of the greatest changes within custom duties focuses on the need to declare each separate transaction, whether goods are being imported or exported, no matter the future changes linked to the Free Trade Agreement.

What should I do if changes are required to my VAT processes?

Whether you’re unsure whether changes are required to your VAT processes, or you believe that a change in liability is a definite, you should move forward by considering the logistics of your supply chain. Within this step, you should see whether registration requirements are flagged, which if so, you should complete with urgency in order to maintain your VAT liabilities.

As this can be complex, working with business specialist accountants will be encouraged, which we can support you with.

Do I need to account for VAT in conjunction with every import/export? 

Down to a change of landscape, Postponed VAT Accounting is now available to support UK VAT registered businesses. This provides the flexibility to either account for import/exports through each transaction, or for declarations to be made per each return. It all depends on your supply chain and processes in relation to customs. However, for cash flow benefits, making use of PVA is recommended.

A significant change has been experienced as a result of Brexit. Down to this, it’s understandable if VAT changes are new to you, and if you’re feeling overwhelmed with changes to customs duties and to viable processes moving forward. We at The Financial Management Centre can help to boost your awareness around the business after Brexit – How VAT will change, specifically for your business.

Contact our team today to keep in the know of how business after Brexit will pan out, from the feasibility of your supply chain to the tax liabilities you carry. Ease the complexity of VAT and its standpoint as a necessary understanding by considering support. Moving forward, post-Brexit changes may be the case, which we will keep you updated with.


Changrez Khan
Changrez Khan

Changrez is the owner and director of TFMC Southend-on-Sea. He is a Senior Financial Management professional with over 25 years of progressive experience. Changrez has a deep knowledge of accounting and finance with world-class educational and professional qualifications. He is commercially focused and can add value to any enterprise through finance collaboration with core Business. He has demonstrated a track record of building and leading high performing teams.