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Friday 28 December 2018

Vat change

HMRC send me a barrage of emails, offering webinars and other time-wasting useless advice. The one I got today, is typical.

It's December 28, 2018. This email is to warn me of a change that's happening to the way we pay VAT to EU countries, as of 1st January 2019. Thanks for the warning, guys. Three days to make the change.

The last time they did this, was when they decided that we have to pay VAT on EU sales, at the rate of VAT that each country charges, instead of the 20% that we have in the UK. This did almost nothing to the amount I paid, but added a considerable amount to me workload. And I had to make the change three days before the deadline, because they didn't bother to tell me about it, and I found out by accident.

This time, they are telling me that if my sales to EU countries are less than  £8,818 (per year, exclusive of VAT), then I can forget the new complicated system and just pay VAT on it as if it were sales in the UK.

I'm way above that threshold, and they know that because I send in a VAT return each quarter. So why did they send me that email? Because they can't be bothered to send their spam to only those who are affected by it.

But there is something I would like to know.

We leave the EU on March 29, 2019, that's three months away. When that happens, do I charge VAT on sales to EU countries? Currently, I don't charge VAT on sales to the USA, or any other non-EU country. So after we leave (if indeed we do leave), do I charge VAT on sales to, for example, Germany?

Has anyone even started to think about this?

My default position is that after we leave the EU, there's no reason why I would charge VAT on EU sales, because they become like the USA. But I really would like definitive guidance from HMRC on this.

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