So it’s happening.  The UK is formally due to leave the EU at 11pm this Friday, January 31, 2020.

This is a key event for the UK, particularly business owners who have to deal with the practical implications of Brexit.

HMRC guidance

HMRC has issued a LOT of guidance about the subject for different businesses.  You can check out the front page of HMRC’s VAT homepage, which includes a section about Brexit:  There are 6 sections about the subject, explaining how businesses should deal with VAT after Brexit.

Most of HMRC’s advice is for businesses who import or export goods on or after January 31.  From 31 January, this will include transactions in goods with the EC.  In practice, the most important thing is that the business has an EORI number issued by HMRC and beginning with the prefix “GB”.  Check out HMRC’s guidance on this subject here:

MOSS VAT registrations for businesses selling electronic services to consumers in EC countries

One of the other implications is for business who are registered for VAT in the UK under the “MOSS” scheme.  The UK VAT registration scheme for MOSS will end for sales on 31 January.

This might sound like good news.  However, there is a downside to this.  MOSS businesses will then have to register for VAT or register for the VAT MOSS scheme in any EC country.  This means that they will continue to pay VAT on sales to non-business customers in EC countries.

  • You’ll need to register by the 10th day of the month following your first sale to an EU customer after Brexit.
  • For example, if you make your first sale after Brexit on 12 February 2020, then you must register by 10 March 2020.

I suspect that the tax offices in Ireland and the Netherlands will each be receiving applications from many UK business in the next few weeks.  Check out HMRC’s guidance about the subject

What will happen to VAT long term?

VAT was originally introduced to the UK in 1973, as part of the conditions of membership of the then “Common Market”.  However, although it was originally an “EC” tax, I doubt that we’ll be seeing the end or any major changes for the time being.  As a sales tax, VAT is one of the largest sources of revenue for the government.  It functions very well and is a very efficient efficient system for collecting tax.

More importantly, the VAT system is now the most common sales tax in the world, so I don’t think that we’ll be seeing major changes any time in the foreseeable future.

Either way, this last week of our membership of the EC seems almost a non-event after the Brexit drama of 2019.  Personally I will just be relieved when it’s done so that businesses can move forward with some certainty.

Happy Brexit Day!


January, 2020


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