From 1st January 2021, one of the changes in VAT is that business to customer (B2C) supplies of services will follow the same rules for both non-UK EU and non-EU customers. So effectively, this is what is VAT free Services to non UK customers. You can supply eligible services to EU individuals VAT free.
Not all B2C services are VAT free
Although no UK VAT will be incurred by the customers, this does not apply to all B2C supplies. An example is digital services where VAT is generally applicable. You can find a list of eligible services here
Is there a benefit of keeping UK VAT registration then?
The answer to the above is likely yes.
Your business can remain UK VAT registered without having to make UK taxable supplies if the services provided would otherwise be VATable if supplied to a UK customer.
That means you still recover the VAT on your own costs. You’ll get VAT refunds from HMRC as per normal rules.
ERAA Consulting Limited are accountants and tax advisors. We are also business growth specialists. If you need any help in Xero book keeping, accounting, VAT accounting, tax returns & payroll, please feel free to contact us here
