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Brexit B2C regulations: Same rules to apply to UK B2C services to EU and non-EU customers

UK businesses are exempt from VAT in many types of B2C transactions with customers outside of the UK.

VAT exemptions apply to several services provided to non-UK customers, including advertising, financial services and consulting. 

However, the VAT exemption did not apply to B2C services provided to customers in EU countries, in line with European regulations.

Upon the completion of the Brexit transition period, it stood to reason that HMRC could treat B2C services to customers in European countries identically with equivalent services provided to customers in non-European states. 

However, given the uncertainty surrounding Brexit negotiations, nothing could be taken for granted.  

Brexit B2C breakaway

UK authorities have now confirmed that VAT exemptions on specified B2C services will now apply when providing such services to customers in European states, just as they would to customers in any non-European state outside of the UK. 

Applicable B2C services to customers in EU states will therefore no longer be subject to VAT by UK authorities. 

To understand the practical implications of the change for your businesses and, and to gain an accurate understanding of precisely which services will no longer be subject to UK VAT, it is advisable to consult a VAT professional.

Negotiating with uncertainty

Brexit will likely have complex VAT implications for any UK business that is currently supplying, or plans to supply, goods or services to EU states. 

Moreover, even at this late stage, Brexit negotiations remain fluid. 

Certain UK businesses should take particular note of a potential need to register for VAT in the European jurisdictions once the transition period has ended. 

Vatglobal is analysing regulatory changes in real time at a regional and national level to provide guidance on how changes will affect each business sector.  Our team is available to help you take advantage of the new regulations and avoid any compliance issues. 

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