VAT on services after Brexit for both buying and selling in EU and further afield

Let me share details about VAT on services after Brexit for both buying and selling in the EU with QuickBooks Online (QBO), @SARAHSYGROVE.

There will be VAT code changes from 1 January 2021. UK VAT registered businesses may need to consider reviewing Import VAT (also known as PVA Import or Postponed VAT accounting), which must be reflected in the VAT return.

When your business receives imported goods from outside of the UK and is registered for VAT in the UK, you may be required to review the Import VAT on your VAT return. However, there will be no changes to the treatment of VAT or how you account for the movement of goods between Northern Ireland and the EU.

Then, once you purchase goods from another business that is registered for VAT in an EC Member State, you should not be charged VAT if you give the supplier your VAT registration number. The supplier will then charge you under the reverse charge mechanism, and you can then account for the VAT at the rate applicable in your country.

Due to postponed VAT accounting, there will be changes to the way you complete the boxes on your VAT return. To know the appropriate VAT codes to use, I'd recommend checking out this article: QuickBooks VAT codes.

Also, I'm adding these articles to answer the most commonly asked questions about the Brexit VAT: 

• Brexit FAQ

• VAT changes for 2021

Let me know in the comments if you have other VAT concerns in QBO. I'm always around to help. Take care, and I wish you continued success, @SARAHSYGROVE.

Rea_M,

Thanks for your response.  There did seem to be a heavy emphasis on goods , not services which my query related to. I know there are differences between the two which means I am still not clear .  I think you are saying that for our service purchases from EC that reverse charge still applies . What about purchases from outside the EC and especially where we then pass the service on to a client who is not in the UK?

Also - you did not address the query relating to our Sales of a service into the EC . Should that still be 0.0% ECS, or should it now be 'No VAT'

Thank you

Hello Sarahswygrove, if you have a look at this link it tells and explains what the codes are and if you are still unsure which to select then we advise you speak and ask a trained and qualified accountant to clarify which to use as we are not trained accountants just technical support. 

Thanks Ashleigh1,

Many of the VAT codes seem to assume that we are still part of the EU which is confusing me. For VAT purposes - do I assume we are?

Hi Sarahsygrove, We would advise that you speak to an accountant or HMRC about this as they will be able to provide that information better to you then us as we cant advise you what code to use in specific circumstances as we are not trained accountants, you are 

I would suggest paying for professional VAT advice.

Alot of Accountants do not understand the Import & Export treatment of VAT.

Also, it there are different rules for different services. HMRC were offering Grants to gain training and advice after Brexit. I have been doing VAT returns for over 30 years and it took a whole day with a very experienced ex-VAT officer to help me with applying the correct rules for VAT after Brexit for goods and services. 

A simple response to a simple question would have been more useful.

Again:

What code should be used when selling services from UK to EU?

There can be only one, What is it!!!!!

The link shared was not useful, what on earth does 'intra' mean!!!!!

A SIMPLE ANSWER PLEASE - ONE CODE - JUST ONE WITH NO OTHER CONFUSING ADDITIONAL INFORMATION!

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@123145858365249 wrote:

What code should be used when selling services from UK to EU?

There can be only one, What is it!!!!!

 

The link shared was not useful, what on earth does 'intra' mean!!!!!

 

A SIMPLE ANSWER PLEASE - ONE CODE - JUST ONE WITH NO OTHER CONFUSING ADDITIONAL INFORMATION!

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Unfortunately @123145858365249 it isn't simple.

Export of Services has always been a bit of a dog's dinner - not Brexit related, it was just as bad before.

It depends on exactly what you're selling & who you're selling to (business or consumer) - you must determine the Place of Supply (either in UK or customer's country) to decide whether you charge UK VAT or Zero Rate.

(ignore the Intra-EU codes in QBO - they're no longer relevant for services)

A bit of light reading ... https://www.gov.uk/guidance/vat-how-to-work-out-your-place-of-supply-of-services

Hope this helps.

Ive read through this thread - support from Intuit appears pretty useless!

The question was simple - What VAT code in QBO do we use for sales of services into the EC post Brexit!

From what I see - Non VAT seems to be the solution as per the description provided by the VAT code in QBO setup. But per HMRC notes, even though the Sales are Not VATable  or Declarable for Box8, they are subject to declare in Box 6 - in which case No VAT is not the correct code as this does not report Sales in Box 6.

Therefore only possible code to utilise is Exempt or Zero Rated neither of which are correct for categorisation of the services supplied type. HAs anyone got better advice please?

Hi Ashleigh

Im responding to your support on VAT Code query for Sales of services Post Brexit. You simply advise persons to seek expert advice from Accountants etc.  But that does not assist in advising the QBO VAT code to utilise.

I added to the thread, because as an Accountant I know that  - Nil to declare in Box 1& Box 8, but Net sales are declarable in Box 6. But No VAT does not report on the Return in QBO at all.  Therefore as a QBO support team member please tell me which code to utilise in QBO that will correctly declare sales of services that are normally a Taxable supply (Not EXEMPT) and effectively would work as 20%ECS which I belive to be no longer valid as this will report in Box 8 too.

Many thanks for assistance!!  

Hi SteveHands, thanks for joining this thread

As customer support we're unable to provide accounting or tax information; this includes recommending which code to use and is outlined in our T&C's. We can only advise that you refer to a colleague or tax professional if you're unsure. HMRC also have guidance relating to VAT rates which our codes are designed in-line with.

If you still feel a code is posting incorrectly after this, or that there is no appropriate code to use, please contact support on 0808 234 5337. The agents available here will have access to set up a screenshare to view this further with you.