Brexit - Exporting
We provide a summary of what you need to know about selling into the EU.
Exporting Goods
Exporting goods to the EU is now dealt with in the same way that exports to the rest of the world used to be under EU membership. There are therefore changes to VAT and Customs and Excise.
VAT
For VAT purposes exports may now be Zero Rated as long as you can prove that they are exported. The rules on what is accepted as proof of export are found in Section 6 of this VAT guidance.
This does not mean that your customer will not pay VAT. VAT is then applied by the country the goods are being imported to and this VAT is then paid by the customer.
In practice, many exporters will not want to leave it to their customers to deal with paying the VAT on import. Therefore they will often work with their Shipping Agent to pay the local VAT on behalf of the customer and include this in the price of what is being sold.
Rules on registering for VAT in EU countries remain. If the total of your exports goes over the threshold for that country you must register for VAT in that country. These thresholds can be found here.
CUSTOMS
A new issue for exporters to the EU is getting their goods through Customs. Most small businesses will handle this through a Customs Agent rather than complete paperwork themselves In many cases the Customs Agent will be the same company that is handling the shipping.
As a minimum a C88 Customs Declaration is needed but depending on the goods, other certificates and licenses may be needed. It is important to know what commodity your goods are considered to be for export purposes. A commodity code checker is available here.
Then exporters will need to know what documentation is required for that particular commodity.
Your customer may also be required to complete paperwork to complete get goods through customs.
Where customs duties apply these will obviously need to be paid.
Selling Services
Selling services to the EU now becomes the same as selling services to any third party country. Assuming that the use of the service is outside the UK, the service is now considered ‘Outside the Scope of VAT’, and therefore no VAT is applied.
