HMRC updated VAT notice 700/1 to remove the advance UK VAT registrations for EU businesses. These rules allowed EU businesses to apply for UK VAT registrations in advance of a no-deal Brexit.
As stated in our original story from October 2019, the temporary rules were initially brought in for EU businesses who trade with UK customers and may not currently require a UK VAT registration due to using existing cross-border VAT simplifications such as:
- Call-off stock arrangements; or
- Relying on the recipient to account for the VAT on supplies (i.e. acquisition tax).
The UK leaving the EU on 31 January 2020 enacted the EU (Withdrawal Agreement) Act 2020. The transition period rules aligning UK VAT legislation with EU VAT rules will continue to apply until 31 December 2020. This means the simplifications still apply. As a result, the need for a VAT registration is not currently envisaged.
Whether this process will need to be re-introduced towards the end of the year will depend on on-going Brexit negotiations.
In the meantime, if you are:
- An EU business that originally applied for a UK VAT registration under this process;
- Received a UK VAT certificate with a start date of 1 February 2020
Then it is important to check with HMRC that they cancelled the registration.