View the related Tax Guidance about One Stop Shop (OSS)
Brexit ― cross-border supplies of services after the implementation period
Brexit ― cross-border supplies of services after the implementation periodThis guidance note considers a number of issues that may be relevant to businesses involved in cross-border supplies of services between the UK and the EU in connection with Brexit. It also covers certain transitional rules where there is a risk of double taxation.For an overview of the impact of Brexit on VAT and customs more broadly, see the Brexit ― overview guidance note.For further in depth commentary on the law, see De Voil Indirect Tax Service V1.301.Impact on place of supply of servicesThe UK’s place of supply rules did not change fundamentally after the end of the implementation period. However, there were some consequential changes to the rules / the practical application of the rules as a result of the UK no longer being an EU member state. The changes particularly affected certain services that are not covered by the ‘general’ place of supply rule. For the general rule and special rules, see the International services ― overview guidance note.The table below summarises the kinds of services most affected by changes when the implementation period came to an end:Type of serviceBrexit impactGuidance noteHiring of goodsThe place of supply rules previously contained ‘use and enjoyment’ provisions that could shift the place of supply where it would otherwise be non-EU but the goods were used and enjoyed in the UK (and vice versa). The provisions have changed so use and enjoyment applies
Cross-border VAT accounting schemes ― One Stop Shop (OSS) and Import One Stop Shop (IOSS)
Cross-border VAT accounting schemes ― One Stop Shop (OSS) and Import One Stop Shop (IOSS)This guidance provides an overview of the VAT accounting simplification schemes available to businesses who supply goods or services within the EU to non-taxable persons.For more detail on cross-border supplies, see the Exporting goods ― overview, Imports ― overview and International services ― overview guidance notes.Overview of the VAT accounting schemesIn order to simplify cross-border VAT accounting, VAT accounting schemes have been introduced across the EU which UK businesses are able to use in certain circumstances. These schemes aim to simplify VAT accounting within the EU and aid VAT compliance related to online sales to consumers. The schemes remove the requirement for businesses to VAT register in a number of jurisdictions where it otherwise might be necessary to do so. The schemes are the One Stop Shop (OSS) (which is made up of the Union OSS and Non-Union OSS) and the Import One Stop Shop (IOSS).The schemes are not mandatory, and businesses can choose to manage their VAT accounting obligations through alternative approaches; however, for the majority of businesses, the schemes offer a significant reduction in the VAT compliance burden associated with cross-border supplies to consumers. Further detail on when the schemes can be used and the benefits of the schemes are set out below.As it stands, the UK has not created any similar schemes for supplies from outside the UK to UK consumers. Therefore, typically, a non-UK established business selling to a UK market
Weekly tax highlights ― 26 August 2024
Weekly tax highlights ― 26 August 2024Direct taxesCompany cars: advisory fuel rates from 1 September 2024HMRC has issued revised advisory fuel rates from 1 September 2024. The rates are to be used only where employers either reimburse employees for business travel in their company cars or require employees to repay the cost of fuel used for private travel.The fuel prices for petrol, diesel and liquefied petroleum gas have also been updated.See Simon’s Taxes: E4.621.Indirect taxesNew and updated HMRC guidance on VAT One Stop Shop (OSS)HMRC has published new guidance to set out the process of cancelling or making changes to a VAT OSS Union scheme registration. It covers when to cancel or make changes, what happens after cancellation, re-registering for the scheme, and registering for the scheme in an EU country.Additionally, HMRC has updated the collection of VAT tertiary legislation to update the 'Notice published by HMRC in accordance with VATA 1994, Sch 9ZD, para 8(2)' by introducing a new section that outlines the process and timeline for a VAT One Stop Shop (OSS) registered businesses to notify HMRC if they no longer make eligible supplies under the
VAT registration ― compulsory
VAT registration ― compulsoryThis guidance note provides information relating to when a person is required to register for VAT on a compulsory basis. The VAT registration ― voluntary guidance note provides information relating to when a person is entitled to register for VAT on a voluntary basis. The VAT group and divisional registration ― overview guidance note provides information on VAT group and divisional registration. For detailed commentary on registration and deregistration, please refer to De Voil Indirect Tax Service V2.1.When may VAT registration be required on a compulsory basis?HMRC can issue an assessment for underpaid VAT covering a period of up to 20 years to a taxable person that has either not registered for VAT at all or not registered for VAT on time. This means that monitoring when and whether a compulsory registration requirement arises is an integral part of good governance. VAT registration may be required on a compulsory basis as a result of:•supplies of goods which the supplier, or a predecessor, has claimed, or is intending to claim, a repayment of VAT•taxable supplies by a person established in the UK•buying in services from outside the UK•relevant acquisitions of goods in Northern Ireland•acquiring a business as a going concern•taxable supplies by a person not established in the UKVATA 1994, Schs 1–3AThe activities for which registration is required as a result of supplies of goods which the supplier, or a predecessor, has claimed, or is intending to claim, a repayment of
Brexit ― international movements of goods after the implementation period
Brexit ― international movements of goods after the implementation periodThis guidance note considers a number of issues associated with Brexit and the international movement of goods.For an overview of the impact of Brexit on VAT and customs more broadly, see the Brexit ― overview guidance note.Issues associated with Northern Ireland are covered in the Northern Ireland ― overview guidance note.For further in-depth commentary on the law, see De Voil Indirect Tax Service V1.301.What is the impact on customs and customs declarations?Under the terms of the Withdrawal Agreement agreed between the UK and the EU, Great Britain left the EU customs union.As Great Britain left the EU customs union, many businesses moving goods to or from the EU started to deal with customs declarations despite not being required to do so previously. Customs declarations are required irrespective of the fact that the UK negotiated tariff and quota-free trade with the EU for originating goods. As the completion of customs declarations can be complicated and requires a business to have compatible software, many businesses have chosen to appoint an agent to perform this for them. Declarations are generally required in respect of both goods entering the UK and goods leaving the UK. The situation is complicated for movements of goods involving Northern Ireland owing to its special status, for which see the Northern Ireland ― overview guidance note.Phased border controls and delaying declarationsBorder controls were phased in between 1 January 2021 and 31 December 2021 (extended from an original date of
Northern Ireland ― moving goods between NI and the rest of the world
Northern Ireland ― moving goods between NI and the rest of the worldThis guidance note looks at movements of goods between Northern Ireland and the rest of the world, including the EU.For an overview of the VAT status of Northern Ireland generally, see the Northern Ireland ― overview guidance note. For information about the VAT rules in each EU country please refer to the VAT in the EU guidance note.Further in-depth commentary on the law can be found in De Voil Indirect Tax Service V1.301 and V3.360.Northern Ireland is given special status under the terms of the Withdrawal Agreement under the Protocol on Ireland / Northern Ireland as described in the Northern Ireland ― overview guidance note.Moving goods from outside the UK and EU into Northern IrelandImports into Northern Ireland from outside the UK and the EU are in most cases treated the same from a VAT perspective as imports into Great Britain. Imports into Great Britain are covered in the Imports ― overview (rules from 1 January 2021) guidance note. Postponed accounting is available for these imports in much the same way it will be for goods imported by VAT registered businesses into Great Britain (see the Imports ― postponed accounting for import VAT guidance note). Special rules for imports in consignments of £135 or less apply to imports from outside the EU and UK into Northern Ireland (where the goods are located outside the UK at the point of sale). These rules are covered for Great Britain
Northern Ireland ― moving goods between GB and NI
Northern Ireland ― moving goods between GB and NIThis guidance note looks at special arrangements that apply for movements of goods between Great Britain and Northern Ireland.Further in-depth commentary on the law can be found in De Voil Indirect Tax Service V1.301 and V3.360.Northern Ireland is given special status under the terms of the Brexit Withdrawal Agreement under the Protocol on Ireland / Northern Ireland as described in the Northern Ireland ― overview guidance note. With effect from 1 March 2024 the Value Added Tax (Distance Selling) (Amendments) Regulations amend the scope of the Import One Stop Shop (IOSS) scheme to remove the VAT reporting and accounting requirements for goods moved within the UK, including between Great Britain and Northern Ireland. All VAT due on supplies of goods moved within the UK should be accounted for through the UK VAT return. For information about the IOSS scheme, see the Cross-border VAT accounting schemes ― One Stop Shop (OSS) and Import One Stop Shop (IOSS) guidance note. Are customs declarations required for goods moving between Great Britain and Northern Ireland?In certain circumstances, customs declarations are required for goods moving between Great Britain and Northern Ireland. These requirements are explored at a high level below.Goods moving from Great Britain to Northern Ireland When goods move from Great Britain to Northern Ireland, there is no requirement for the goods to be declared when they leave Great Britain. However, an import declaration is required when the goods arrive in Northern Ireland. In order
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