Post Brexit summary: FAQ’s for B2C businesses

UK businesses

Following the deal made with the EU, what is the difference for UK businesses selling to consumers in the EU post Brexit?

Although it was publicised that there would be no tariffs under the deal, this only applies to goods that comply with certain rules of origin (broadly speaking, they are made from materials originating in the UK or EU). Therefore, it is still important to check whether Customs Duty may apply to goods that are being sent to the EU, especially if UK businesses are importing components from outside the EU.

UK businesses will no longer have the benefit of accounting for UK VAT on sales until the distance selling threshold is breached and the current EU Mini One Stop Shop (MOSS) for non-EU businesses only covers services, not goods.

There is no registration threshold for non-EU established businesses, so the first sale of any goods delivered to a consumer in any EU member state on a B2C basis will result in a VAT registration liability in that EU member state. Therefore, UK businesses selling goods to EU consumers on a B2C basis will have the following options:

  1. UK businesses can be responsible for importing the goods into the EU member state concerned and for the delivery of the goods to their customers (ie on delivery duty paid terms).; they will have to pay local import VAT and charge local VAT (once registered).
  2. UK businesses can ask their consumer to be the importer in which case no UK VAT would be charged to the consumer, but the customer would be responsible for import VAT and any duty (there shouldn’t be any under the terms of the deal for most goods see above) when the goods reach the EU member state concerned (ie on delivered-at-place terms)
  3. As a result of the issues concerning the options above, many UK businesses selling to multiple EU jurisdictions are suspending sales to the EU until July 2021 when the EU is launching a new system for non-EU businesses. Therefore, UK businesses can choose to wait until July 2021 to make EU consumer sales and to then use new rules for goods with a value of less than €150 (see separate section).
  4. Another option would be to obtain EU premises, register for VAT in that EU member state concerned and to fulfil all EU orders from these premises
What are the key considerations in choosing which option above?
Option one

The disadvantage of option one is that UK businesses may be required to register for VAT in every EU member state  they have consumers in.  This, combined with the need to appoint a local fiscal representative, increases the administrative burden and compliance costs involved in selling to EU consumers. The UK business will need an EU EORI number which will apply across all EU member states.

Option two

The disadvantage of option two is that the consumer is inconvenienced in having to deal with paying VAT and Duty before the goods are delivered to them, and they may have to visit a local depot to collect their goods. There is also the difficulty of consumers not knowing the true cost of an item when it is ordered. However, it may be possible for parcel companies and freight forwarders to pay the VAT and Duty on the customers behalf so that the goods can be delivered to them hassle free (but this does not remove the cost of course).

Option three

The obvious issue with option three is the lack of trade in the meantime, whilst businesses wait for July 2021. This is especially costly in the current climate of lockdown when there is an increase in online mail order goods being sold.

Option four

The costs associated with this option would be higher than the other options as businesses would have to operate the premises and would still be liable to account for VAT in the EU member states in which  consumers are located (subject to the distance selling thresholds until July 2021). There would be local administration and compliance requirements to deal with, as well as the logistics of operating the premises and distribution of goods.  However, you would be entitled to use the MOSS/OSS.

What are the new rules being introduced for EU B2C sales from 1 July 2021?

The EU will be launching a new Import One Stop Shop (IOSS) for non-EU businesses.  Under the scheme, which is optional, UK businesses can register for VAT in one EU member state and account for VAT on sales in all other member states through that registration. There will be no import VAT or Customs Duty payable (subject to compliance with rules of origin) if the consignment is valued at less than €150. A monthly IOSS return will be required which will account for VAT on all EU sales on a country-by-country basis (at the various differing VAT rates). The scheme will resolve a lot of the administrative issues that would otherwise be the case (ie under option one set out above).

As far as the UK is concerned, these sales will be treated as zero-rated exports assuming that the appropriate evidence is retained.

As a result of the above, many UK businesses are likely to choose to register for VAT in Ireland, because of the shared language. There are already unprecedented backlogs and delays in obtaining this registration,  as a result of Brexit, and this is likely to increase in July 2021. We have close links to our MSI Global Alliance associates in Ireland and can assist UK businesses with VAT registration  if required.

What if we supply digital services to EU consumers?

As with the sale of goods, there is again no registration threshold for the sale of digital services (eg music downloading, videos, online gaming, apps, software services etc), therefore UK businesses would be required to register for VAT in each EU member state where they have consumers.

Alternatively, they can use the EU MOSS scheme for non-established businesses. This will mean having to register in one EU member state for the VAT MOSS non-union scheme as a non-EU provider and accounting for VAT on all EU sales (at the various differing VAT rates) through the one MOSS return.

As a result of the above, many UK businesses will choose to register for VAT in Ireland. As previously mentioned, there is already unprecedented backlogs and delays in obtaining VAT registration in Ireland, as a result of Brexit, and this is likely to increase in July 2021. We have close links to our MSI Global Alliance associates in Ireland and can assist UK businesses with VAT registration if required.

Any changes for any other services (non-digital) to EU consumers?

HMRC has changed their policy in respect of the place of supply of certain services which would previously have attracted UK VAT when provided to EU consumers before Brexit, this will no longer be the case. These services will now be outside the scope of VAT with the right to reclaim related input VAT (ie effectively zero-rated). This applies to most professional services to consumers (legal, accounting and advisory) and more detailed commentary is available in our article here.

Non-UK businesses selling into the UK

What are the requirements for non-UK businesses selling goods to UK consumers?

If you are a business without an establishment in the UK, the VAT treatment will depend on the value of the goods (each consignment) being sold and whether this value exceeds £135 or not as follows:

  1. Goods not exceeding £135 in value: there will be a requirement for the EU business to register for UK VAT and charge UK VAT at point of sale on the supply being made to the end customer.
  2. Goods exceeding £135 in value: the importer of the goods is required to be registered for UK VAT and will have to charge UK VAT on these supplies. However, in this case, there is an option to have the end consumer take responsibility for the cost of import into the UK. If businesses opt to take this route, the consumer is required to pay the import VAT when the goods arrive, but the overseas business does not need to charge VAT to the customer so would not be required to register for UK VAT.

More detailed commentary of these rules is available in our article here.

Are there any special rules for Online Marketplaces (OMP)?

If goods are already in the UK and are being sold through an OMP, the OMP will be deemed to be making the supplies for VAT purposes. In addition, OMP’s are now jointly and severally liable for any UK VAT that is due on any sales made through the OMP. Therefore, OMP’s will now have to not only take careful consideration of their own VAT position but will also have to keep an eye on and police the VAT treatment adopted by their users.

If you are a business affected by the changes above and require any assistance with UK VAT registration, or assistance in respect of EU B2C sales, we have a dedicated team of experts experienced in this area and would be pleased to help. We would be pleased to advise you further and can assist with VAT registration applications, as well as any future compliance requirements. If you wish to discuss any aspect further, please contact Kamlesh Chauhan, Senior VAT Manager, on 020 7969 5584 or via email

Withdrawal of the Retail Export Scheme

The Retail Export Scheme (the Scheme) has been withdrawn with effect from 1 January 2021 following Brexit.

The Retail Export Scheme allowed overseas visitors to purchase goods VAT-free when in the UK and leaving the EU with the goods within three months of the sale. Retailers previously would charge VAT on the initial sale of the goods, but the customer would claim the VAT back from the retailer when the retailer received a refund document from the customer that had been stamped by a customs officer at the border.

The Scheme has always been voluntary, but from 1 January 2021 it will no longer be available.

Retailers will, however, still be able to sell goods to overseas customers at the zero rate of VAT but only if the goods are sent from the retailer directly to the overseas address of the customer; not if the goods are given to the customer at the time of purchase.

If you wish to discuss the matter further, please contact Stephen Patey, Senior Manager, on 020 7969 5684 or via email

Brexit: the Northern Ireland protocol

So how does this affect the VAT treatment of goods being moved between Northern Ireland, the rest of the UK and the EU?

The starting point to note is that businesses moving goods from Northern Ireland will now need a special XI EORI number.

When goods are moved from Northern Ireland to the EU, the existing EU VAT rules remain in place. This means that the distance selling rules apply when selling goods to consumers in other EU countries (until 1 July 2021 when the distance selling thresholds will be abolished across the EU).

When supplies of goods are made to EU business customers, the sales should be treated as being a zero-rated intra-EU dispatch of goods. This is of course different to the position when goods are sold from the rest of the UK to other EU countries, which will be seen as being an export of goods. Such a sale is also zero-rated but duties will be payable on import into the EU, unlike the situation where they move from Northern Ireland.

When goods are sold between the rest of the UK and Northern Ireland this will still be a domestic supply, so VAT will be chargeable accordingly. However, when businesses move their own goods from the rest of the UK to Northern Ireland this will be seen as being an import for VAT purposes, so an output VAT amount will need to be declared with the same amount being recoverable as input VAT (subject to the usual recovery position).

This will also impact supplies by members of a VAT group. Usually, of course, supplies between members of the same VAT group are disregarded for VAT purposes. However, when goods are supplied from the rest of the UK to Northern Ireland, VAT will now be due on this supply in the same way as the movement of own goods detailed above.

There will be no need to account for any VAT when own goods are moved from Northern Ireland to the rest of the UK.

Trader Support Service

As well as VAT differences, there will also be additional customs declarations to be made when sending goods between the rest of the UK and Northern Ireland. HMRC have therefore introduced the Trader Support Service. This is a free online tool which offers support and guidance to businesses that are moving goods between the rest of the UK and Northern Ireland. Businesses that sign up for this service will also automatically be issued with an XI EORI Number.

Margin scheme sales

It should also be noted that from 1 January 2021 any margin scheme will not be available when stock is purchased in the rest of the UK and sold in Northern Ireland. Instead, VAT will need to be accounted for on the full value of the supply as normal. The margin scheme will still be available for the sale of goods that are purchased in Northern Ireland or the EU and sold within Northern Ireland, the rest of the UK or the EU.

Brexit and VAT


If you submit Intrastat forms, you will still need to submit Arrival forms at least for 2021. However, you no longer need to submit Dispatches forms.

EC Sales Lists

These will no longer be required unless your business is located in Northern Ireland.

Mini One Stop Shop (MOSS)

If you are registered for MOSS, you will no longer be able to submit the existing MOSS returns to HMRC. You will either have to register for VAT in each of the EU States where you trade, or register in one other EU State to use what is referred to as the Non-Union MOSS and submit returns to that country’s tax authority.

VAT return boxes

Boxes 2, 8 and 9 are no longer relevant and should be completed as nil, unless your business is located in Northern Ireland. In this case you can complete them as normal.

Importing Goods

If you are importing goods from the rest of the world or the EU, you should account for VAT using what is known as ‘Postponed Accounting’, as follows: if the value of the goods is £100 and the item is standard-rated you declare £20 VAT in box 1 and £20 in box 4, provided you are able to claim back VAT in full.

If you are partly exempt or otherwise unable to recover VAT in full you would enter the amount of VAT in box 4 that you are entitled to claim.

Financial Services Brexit Report 2020

The report summarises data from a survey completed by over 200 Financial Services firms which found results such as:

  • 63% of UK financial services firms did not believe the UK Government has done all it can to create an equivalence agreement with the EU
  • 59% believe London’s position will remain as the pre-eminent center of financial services in Europe from 1 January 2021 despite Brexit
  • 69% believe the Single Financial Services Market and Euro will be weaker without the UK
  • 49% of the firms surveyed had faced problems because of the uncertainty over the ongoing Brexit talks

If you’d like to read the full report, please download below.

Change to HMRC policy in respect of the place of supply for B2C supplies of a professional, technical and intangible nature

UK VAT legislation currently distinguishes between supplies made to private individuals within the EU and supplies made to private individuals outside of the EU. Paragraph 16 of Schedule 4A lists the relevant services and states that the place of supply of these services is where the customer belongs, provided the customer belongs outside of the EU, so no UK VAT is chargeable. However, for supplies to customers based within the EU, UK VAT would be chargeable on the basis that this is a B2C supply of services to another EU country, which is subject to the general place of supply rules.

Following Brexit, although the legislation has not been changed, HMRC have updated VAT Notice 741A to remove this distinction. The notice states that when you provide such services, these services are now deemed to be supplied where your customer belongs so will always be outside the scope of UK VAT.

Interestingly, if the supply is deemed to be supplied where the customer belongs it raises the question as to whether there would then be a requirement for the supplier to register for VAT in the EU country where their customer belongs. We expect that this will be unlikely on the basis that we presume this is intended as an easement which is intended to put people supplying private individuals in the EU on a level footing with people supplying private individuals outside of the EU; though it remains to be seen whether HMRC provide further comment on this aspect of the policy change, and what any subsequent change to the law says.

Property: post Brexit

Faster, then slower

Although we leave the EU today (31 January 2020), uncertainty still lies ahead as to what the conditions will be at the end of 2020 and what, if any, trade agreement will be agreed. With the EU’s strong record of “kicking the can down the road” in negotiations it would not be a surprise to see the economic brakes being applied in the latter part of this year as UK/EU discussions stall and uncertainty returns. However, with the default of WTO terms looming, which suits neither side, a political fudge is likely so that Boris can say he has got Brexit done and for both sides to avoid mutually assured destruction.

UK’s sunny side

Whilst sterling’s fall in value in recent years has provided cheaper access to UK property for overseas investors, which some have capitalised on, the greater certainty over the country‘s future is likely to attract overseas investors, especially those confident of a post Brexit recovery who want to “get in” before sterling strengthens. As an overseas client put it, “You do not know what you have in London when you are living there the whole time”.

The UK has centuries of a stable legal system and a degree of certainty of ownership unmatched in some foreign jurisdictions. It is almost impossible to believe that your London property will be seized just because you have fallen out with the Prime Minister. This is not something that can be said about all jurisdictions.

Shift in Government spending

With the Conservatives having broken through in traditionally Labour held areas, it is likely that the next five years will see less London centric spending and more Government investment in infrastructure in the rest of the country. This will be positive for property prices in these regions. The possibility of the southern end of HS2 being ditched and the money saved being redirected to northern infrastructure would also be positive for that region and, in the longer term, property prices with the improved communications that will arise.

Stormy weather?

One dark cloud for property will be how attractive the UK remains for overseas construction workers. If the Government is too restrictive in its immigration policy and there is a shortage of construction workers, construction costs will rise. However this could provide a boost to the modular construction sector which is less reliant on traditional construction workers and more focused on a technical skill base.

In conclusion

The Chancellor’s March Budget will be an indicator of where this Government’s priorities really lie and will be key in determining the winners and losers – not just for property but for the wider economy. However, after several years of uncertainty there is now an opportunity for the property sector to seize the opportunities that will arise as the Government looks to be seen to be taking back control, even if there are likely to be moments of “are you sure Prime Minister?” from the modern day Sir Humphreys.

If you would like to know more about any points raised in this article, please speak to your usual haysmacintyre contact or Ian Daniels, Head of Property at

What could impact your exchange rate in 2020?

GBP – Brexit hurdles become trade hurdles; Sterling under pressure from economic forces

From a UK standpoint, it’s impossible to avoid Brexit as a determining factor for the economy, but it also symbolises the manifestation of a more profound political force in the post-financial crisis world. Following the election of the largest Tory majority since Margaret Thatcher, the UK is poised to leave the EU in short order, but the next hurdle awaits. The UK must now negotiate a variety of trade deals with its largest trading partners; Germany, the US, the Netherlands, China and France, in order of total trade flows. However, the EU nations together make up ~78%. US trade levels dim in comparison at roughly 15%, though it is the second-largest individual country

In 2020, the Prime Minister’s first aim should be to reduce trade barriers – particularly with the EU – with as few concessions as possible. The success of that venture is likely to be determined by two broad factors: the attractiveness of UK markets, and relative economic growth abroad. There is no doubt that, after over two years of economic and political uncertainty, the UK has fundamentally suffered – though a strong consumer and pent-up capital investment argue for a surprisingly attractive market in European eyes. On the other hand, European growth has eventually mirrored the UK’s dismal sector readings which acts as a deterrent to protracted trade negotiations from the continental contingent.

On a relative basis, one could argue that the Pound will come under pressure if UK economic fundamentals put pressure on trade negotiations or EU fundamentals pick up, strengthening their negotiation position. The clock is already ticking, but will resound more prominently towards June – the final date the UK can ask for an extension and the end of the year when the UK is destined to leave the EU.

EUR – The knock-on effect of trade connections and stymied fiscal efforts leave Euro flat 

The EU isn’t the only economy looking to its domestic markets – 2019 was marked by a deterioration in global growth. The most obvious signs might be viewed through close trade connections and the concurrent declines of Germany, China and Australia. While China has been in a state of gradual deceleration for a decade, the reaction to globalisation post-global financial crisis, the resultant election of Trump, and the recent US-China trade dispute have caused China’s growth rate to decline even faster. Australia and Germany, who by virtue of their close trading connections with the Chinese have fed the global manufacturing phenomenon, are now left on the back foot.

Germany’s decline puts greater pressure on France and the periphery to propel growth, but this notion, while palatable to member countries, places them at odds with EU budgetary rules. From the central bank perspective, both outgoing ECB president Mario Draghi and his successor, Christine Lagarde, have made no secret of the fact that most of their monetary policy arsenal has been expended. Overcoming EU fiscal objections in a way that doesn’t devolve into bloc-wide squabbles is virtually impossible in the short-term, and so meaningful fiscal stimulus seems unlikely. A surprise uptick in global growth is probably the only potential reprieve for the bloc, and historically depressed EUR valuations reflect that reality.

USD – Continual political tension with an outside chance of large currency movements 

The fact that the US has really been the only major economy expanding at a time of considerable political and economic uncertainty has rationally kept the Greenback strong in response to greater investor affection for relatively safe US-denominated assets. In mid-2018, one might have said that the rest of the world was returning to growth, so the Dollar’s strength would ebb, but the last 18 months of perpetual conflict has delayed the symbolic arrival of economic spring. In late 2019, the completion of a US-China phase one deal – skimpy though it is – suggested a sign of green shoots, but this is too superficial a measure in our view.

Heading into a more contentious 2020 US election, the President is likely to reach for the tools that have worked for him in the past. The core theme of which is persistent tension: tension with his allies, his enemies, trade partners, developing nuclear states, and even tension with tradition. Trump’s economic identity is that economic prosperity is a zero-sum game – one nation’s economic prosperity must come at the expense of another’s – which strongly argues against a proper 2020 thaw.

If, however, growth prevails despite constant political tension, pressure for a nationalistic economic approach in the US wanes and so too should global growth’s sensitivity to US foreign policy. Given the economic deterioration throughout 2019, a rebound in some quarters is not out of the question, which might facilitate a rebalancing away from the Dollar (and other safe-haven currencies like the Swiss Franc and Japanese Yen) and towards beneficiaries of the economic tailwind like the Euro and emerging market currencies, whose foreign debt is Dollar-denominated.

If you’d like to discuss your 2020 foreign exchange requirements, start a conversation with a Global Reach currency specialist. Contact Alex Chernoff on 020 3465 8246, or visit for more information.

For further information on haysmacintyre services for Financial Services firms, please contact Melanie Pittas at, or your usual haysmacintyre contact.

Brexit: staff recruitment in the hospitality sector

Figures from recruiters, The Change Group, have indicated that there was a 8.5% fall in registrations from EU nationals seeking work in London hospitality businesses during 2018. Unsurprisingly therefore, 83% of operators surveyed in the 2019 haysmacintyre UK Hospitality Index stated that Brexit would have a negative impact on their ability to recruit staff, an increase from the previous year’s figure of 77%.

The ongoing uncertainty around Britain’s future relationship with Europe is clearly a major factor when it comes to staffing challenges faced by the hospitality sector.

For more information about the haysmacintyre UK Hospitality Index and the impact of Brexit on recruitment in the hospitality sector, speak with Gareth Ogden or your usual haysmacintyre contact.

Impact on retailers sending goods from the UK to other EU member states

But first the good news

In order to help businesses with the changes in customs requirements, HMRC recently announced that it was making available additional funding to help businesses cope with new customs arrangements and declarations.  The deadline for businesses to apply for a grant is 31 January 2020 at the latest, an application can be made even if you previously applied for a grant from HMRC.

The further £10m in grants is open to businesses based in, or with a branch in, the UK, that currently complete customs declarations for importers and exporters.

The grants are available to support costs of hiring staff, including £3,000 for recruitment costs, and up to £10,000 for salary costs, to help build business capacity.  Full details on eligibility are available from HMRC here

Brexit impact on VAT on distance sales

Under current VAT rules, e-retailers can use their UK VAT number to account for sales (B2C) made to other EU member states, as long as the value of sales in each calendar year remains below the EU member states’ distance selling threshold (set at either €35,000 or €100,000).  Going forward it is likely that the distance selling VAT registration thresholds for UK businesses will be removed as a result of Brexit, as this is a VAT simplification measure for EU businesses when trading within EU member states.

EU VAT registration

Any retailers that are trading in other EU member states will be required to apply for VAT registration and charge and account for local VAT for sales in that EU member state (subject to their local rules).  This invariably involves additional costs in term of compliance and administration which can be more cumbersome than in the UK.

It is also likely that any businesses that are already registered for VAT in another EU member state will be required to appoint a local fiscal/tax agent. These agents will become jointly and severally liable for any unpaid VAT and as a consequence high fees and bank guarantees may be involved.

Customs issues

UK businesses will need to consider import VAT and customs duties for goods from the EU and the cash flow impact these may have, many businesses will have to deal with this for the first time.

For incoming goods into the UK, importing goods into the UK will attract UK import VAT and potentially customs duties.  However, there is a new fast track customs clearance and tariff deferred payments scheme, as well as the ability to reclaim the import VAT in your VAT return.  Known as the Transitional Simplified Procedure, it requires a guarantee to be given to HMRC and a duty deferment account to be set up.

In addition, sales of goods from the UK to the EU may be subject to customs duties and tariffs as well as export declarations being required for each sale.

Potential solutions

We are working with a number of clients regards these issues and a range of potential solutions have been discussed.

  • UK distance sellers could ask their EU customer to act as importer which in practice is likely to be commercially unattractive and potentially have a negative impact on your brand.
  • Alternatively, there are UK businesses that will act as “hub agent” and sell goods through their own EU VAT registrations on your behalf.  The goods are sold by the UK business to the hub agent and delivered to the UK hub with UK VAT charged.  The hub agent will then deal with all the EU VAT and customs requirements on your behalf.  However, the fee charged by such agents tends to be a relatively high percentage of the sale price.
  • Lastly, it may be worth looking to set up a subsidiary or VAT registration in the Netherlands or Belgium to channel goods through into the EU.  Both member state have import VAT deferment schemes which are very popular with non-EU businesses.  Many EU member states will allow simplification for import VAT procedures so that the import VAT does not have to be paid but can simply be entered on the VAT return (the UK has also announced that it will apply this after March 2020).

For more information on the potential impact of Brexit on the UK’s VAT arrangements, please speak with Kamlesh Chauhan or your usual haysmacintyre contact.

Get in touch