Post-Brexit VAT — six principles for UK-EU trade
How VAT works for UK businesses trading with EU member states after Brexit — services, goods, OSS, IOSS, Northern Ireland Protocol and postponed VAT accounting.
Six structural principles
1. B2B services to EU — reverse charge
UK services to EU VAT-registered B2B customers follow the general rule: place of supply is the customer's country, so UK supplier invoices without VAT, EU customer self-accounts via reverse charge. Quote the customer's VAT number on the invoice. EC Sales List equivalent (now 'EU Sales List') filed via MTD.
2. B2B goods to EU — export with customs
UK to EU goods are exports — UK VAT 0% on the supplier invoice with full customs declaration (C88 / SAD). EU customer imports the goods and pays import VAT at their country's rate, then deducts it as input VAT (similar net effect to old intra-community supply but with paperwork).
3. B2C digital services — OSS Non-Union
UK businesses selling digital services (SaaS, e-books, streaming, online courses) to EU consumers register under OSS Non-Union scheme via one EU member state (typically Ireland or Netherlands). Charge consumer's country VAT rate, file quarterly OSS return through MOI.
4. B2C goods <€150 — IOSS
Low-value goods (<€150 per shipment) to EU consumers use IOSS (Import One-Stop Shop) — collect EU VAT at checkout, file quarterly via MOI, goods clear customs without recipient charges. Above €150, register for VAT in each destination country or use a fiscal representative.
5. Northern Ireland — dual regime
NI follows UK VAT for services but EU VAT for goods movements (Windsor Framework 2023). NI businesses can have a GB VAT number (services) and an XI VAT number (goods to EU). NI-EU goods are intra-community supplies; NI-GB goods movements have green/red lane checks.
6. Imports from EU — standard import VAT
UK businesses importing goods from EU pay import VAT at the UK border (standard 20% on most goods). Postponed VAT Accounting (PVA) allows accounting for import VAT on the VAT return instead of paying at port — cash-flow advantage for regular importers.
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