No-Deal Brexit: VAT on services supplied B2B (including SAAS)

Not many changes and one simplification for UK businesses…

A No-Deal Brexit will result in a number of changes for UK and EU businesses for VAT purposes, but those who buy or sell Business to Business (B2B) services will see little change to existing procedures.

Currently, when a VAT registered UK business sells services to an EU business customer, no VAT is charged on the invoice as long as the EU customer provides their local VAT registration number. If this cannot be provided, the UK supplier will almost certainly have to charge UK VAT on the sale.

From 1 January 2021, this treatment will continue but from that date UK suppliers will no longer have to obtain the customer's VAT registration number and instead can rely on other forms of documentary evidence to confirm their customer is a business, rather than a consumer. This is a small simplification, but for some it will be welcome.

If the UK VAT registered business buys services from another business in the EU, the treatment of those purchases is unchanged on the UK company's VAT filings before and after Brexit. The UK customer will self-assess the VAT under reverse charge principles.

Transactions between UK businesses and businesses outside the EU are unaffected by any of these changes.

Should you have any further queries on B2B services, or the reverse charge mechanism, please contact a representative below:

Sean O'Sullivan
Tel: +44 (0)20 7430 5966

Jonathan Shepley
Tax Consultant
Tel: +44 (0)20 7430 5968

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