What will change in the new year?
From 1 January 2021, the way in which cross-border trade between the United Kingdom and the European Union is conducted will undergo seismic shifts. At the end of the Brexit transition period in December 2020, the UK became a third country in relation to the European Union. As a result, the concept of acquisitions and dispatches is removed for trade between the UK and EU, to be replaced instead by exports and imports. This has far reaching implications for VAT accounting, importing and supply chains, and it is crucial that businesses consider postponed import accounting for VAT, in addition to VAT registrations and the need for fiscal representation.
What are the crucial steps businesses must take?
There are a range of preparations and mitigations businesses can put into action. Among the most important steps to be taken are to:
- Identify all supply chains that could be impacted by Brexit
- Determine in which EU Member States VAT registrations must be maintained
- Establish whether any new VAT registrations will be required
- Consider changes to customs requirements, such as EORI numbers in the UK and EU
- Plan for changes to VAT reporting requirements
- Understand where fiscal representation may be required, and take steps to secure it if necessary
Whether your planning is complete pending review, at a mid-stage point or as yet uninitiated, assistance is on hand. Our Brexit and VAT white paper offers vital information on how best to understand the impact of Brexit on VAT and will provide actionable guidance on how best to future-proof your business activity into 2021 and beyond.
Sovos is a trusted European VAT expert, providing a single tax partner for compliance everywhere you do business. We solve tax for good, and can help you centralise, standardise and automate all your VAT and fiscal reporting needs