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Cross Border Transactions

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Navigating the significant changes to the VAT and Duty rules that have arisen in relation to trade between the UK and the EU.

 

Cross Border Supply of Goods

We have the expertise and experience advising businesses selling to or buying from EU countries, including advice on how to comply with new procedures and how to minimise the impact of recent changes.

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Cross Border Supply of Services

We have also seen recent significant changes to the cross border supply of services, and some of these may result in UK businesses having to register for VAT in one or more EU countries, particularly businesses providing services to consumers. We can assist service providers to navigate their way through the new rules and manage their VAT position efficiently.

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Case Study

Cross Border Transactions

Cross Border Supply of Goods

Triangulation – not the answer

Intro

We had a client engaged in a business-to-business (B2B) contract to directly supply goods from Italy to Germany.

Issue

The challenge in this case was that the client, based in the UK (without any EU presence), was shipping goods directly from Italy to Germany. When the UK was in the EU, a UK business could avoid an EU VAT registration using the ‘triangulation’ simplification (the EU customer accounting for VAT on their behalf). This was no longer possible since Brexit.

How we solved it

We couldn’t make the issue go away, but we advised them on how the problem could be minimised by registering for VAT in a convenient EU country and how this would enable triangulation.

The Outcome

As a result, our client could go ahead with the contract (and other similar ones in future).

Cross Border Supply of Services

Skip Hire VAT surprise

Intro

The client was a UK-based skip hire company, whose clients typically hired skips for projects in London.

Issue

Prior to Brexit, the client considered their supplies to a Spanish client as being outside the scope of UK VAT since the client was located outside the UK.

Post-Brexit, they maintained this treatment for B2B transactions because it seemed that there were no alterations in this regard. However, HMRC challenged our client’s treatment arguing that UK VAT should have been charged.

How we solved it

We reviewed the position (including the effect of Brexit on the VAT treatment) and although the use of enjoyment rules meant that post-Brexit supplies should be subject to UK VAT, the pre-Brexit supplies were correctly treated as outside the scope of UK VAT.

The outcome

The potential VAT assessment was reduced significantly, and the client could manage the position with their Spanish client.

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