New Brexit rules on services to the UK from EU business

AustroTez

Novice Member
Hi There,
I was wonder if anyone could offer any advice. I am an expat living in Austria. I've had a small UK design business for many years and now I'm having to set up as a freelance in Austria. I still have a large UK client base, and I was wondering if anyone knows what the new rules are for services from an EU country being offered to UK companies? Are UK companies still ok to use services in the EU? Are there any tax implications???

Any advice would be greatly appreciated.

Thanks
Terry
 

vinba

Well-known Member
I think it depends on the type of service being offered. Your accountant in Austria should be able to give advice on this.. VAT would be possibly the biggest question

There's a lot of info here:

 

david1974b

Well-known Member
I highly doubt Johnson and co have explained it. I've not seen or heard any commercisls about it in the lead up to October 1st.
 

AustroTez

Novice Member
It's a total mind field, my english account says speak to the Austrian and the Austrian accountant says speak to the English accountant.

What I've read is, the receiver of the service in the UK is liable for the VAT. But if no VAT is charged, will they still have to pay VAT? I don't want my oldest and dearest clients to be stuck with a VAT bill out of nowhere
 

Erlang168

Well-known Member
As far as I have read, Services are not covered in the UK-EU trade agreement, and effectively, it's like No Deal for most services.
 

Erlang168

Well-known Member
It's a total mind field, my english account says speak to the Austrian and the Austrian accountant says speak to the English accountant.

What I've read is, the receiver of the service in the UK is liable for the VAT. But if no VAT is charged, will they still have to pay VAT? I don't want my oldest and dearest clients to be stuck with a VAT bill out of nowhere
UK isn't applying any rules so far, turning a blind eye to reality.
 

Laureline

Well-known Member
These might help


The EU has a good document here


Electronically Supplied Services, provided by suppliers established in a third country to non-taxable persons (B2C) established in the EU, must be taxed at the place where the customer resides or has a permanent address

  • B2C services like advertising services, services of consultants and lawyers, financial services,telecommunications services, broadcasting services and electronically supplied services are taxed at the place where the customer is established provided the customer is established in a non-EU country
    • Example 47: When a Hungarian company sells an anti-virus programme to be downloaded through its website to private individuals residing in Australia, there will be no VAT due in Hungary.
    • Example 48: Services rendered by a Belgian lawyer to a US professor will not be subject to VAT in Belgium.


The UK has this to say about the General Rule

VAT Special Rules – VAT where the customer is resident

The general VAT B2C rule on cross-border supplies that tax applies where the supplier is located is reversed in the following types of supply. In most cases, the supply (EU or UK) has to VAT register in the country of the customer.

You will need to register for VAT in the UK
 
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D

Deleted member 27989

Guest
Basically the same as before the EU for services kicked in. So you sell without VAT but your customers should do a reverse VAT charge. Whether they are willing to do that is a whole difference situation. What we used to do was just have multiple legal entities to make it easier for the customers.

I’m surprised your accountants behave like that. I would suggest you may need to change as what else aren’t they aware off for your business.
 
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Erlang168

Well-known Member
Below is a reply to an enquiry to my UK financial advisor regarding what my options are with a UK pension pot.

Hi Erlang168,

I have heard back from our compliance team and unfortunately as I thought we do not have the FCA permissions to advice in this case.

You would need to be resident here along with being physically here and I would only be able to advice on UK assets and tax treatment.

Unfortunately I also don’t know anyone amongst the circle of advisers I'm in touch with that is able to help (most are under the same network as me). We have lost a few clients due to these rules since they were introduced a few years ago.

You may be able to do it yourself with L&G although they will not give advice.

If searching for an alternative adviser, you need one with 'passporting permissions'.

I am sorry I have been unable to help on this occasion.

Kindest regards

Andrew
So, I'm now looking for an IFA who understands UK and foreign tax implications AND who legally can advise me.

Cheers, BREXIT!

(note: UK economy 80+% services)
 
D

Deleted member 27989

Guest
Below is a reply to an enquiry to my UK financial advisor regarding what my options are with a UK pension pot.


So, I'm now looking for an IFA who understands UK and foreign tax implications AND who legally can advise me.

Cheers, BREXIT!

(note: UK economy 80+% services)
Which is something you should have anyway when you have more complex international money flows and assets. Just the other day on another thread was a similar reaction from an Austrian accounts.

I'm meeting three different ones next week to see which ones I like for these cross border transaction, asset holdings, money flows etc. Last time when I came to the UK it was just simpler to transfer it all and deal with it that way.

Anyway good advisors are worth it, especially when you have a personal situation that is not the norm.
 

vinba

Well-known Member
Below is a reply to an enquiry to my UK financial advisor regarding what my options are with a UK pension pot.


So, I'm now looking for an IFA who understands UK and foreign tax implications AND who legally can advise me.

Cheers, BREXIT!

(note: UK economy 80+% services)
I had same issue.. Moved my pension into a managed sipp.. Getting pretty good growth..
 

david1974b

Well-known Member
Basically the same as before the EU for services kicked in. So you sell without VAT but your customers should do a reverse VAT charge. Whether they are willing to do that is a while difference situation. What we used to do was just have multiple legal entities to make it easier for the customers.

I’m surprised your accountants behave like that. I would suggest you may need to change as what else aren’t they aware off for your business.

Here we go. Your typical it's now back to how it was before 1973 post.

It's not simple, it's ridiculoua to talk as though it had suddenly became highly complex for the UK inside the EU for services.
 
D

Deleted member 27989

Guest
Here we go. Your typical it's now back to how it was before 1973 post.

It's not simple, it's ridiculoua to talk as though it had suddenly became highly complex for the UK inside the EU for services.
??? This mechanism has been in existence for a very long time, it really isn't anything new. It was already present whilst the UK was in the EU. Pretty standard practice, any half decent accounting software was already able to cater for this. Have you actually run a business that traded internationally?

PS Surely you mean before 1993 ;) Do you even know when the EU was formed and what it does?
 

gyorpb

Active Member
Have you actually run a business that traded internationally?
I have. In fact, I‘m doing it right now. Within the EU, thank God, which is a breeze. I used to do have to deal with Switzerland, which was a right pain, in comparison. My personal opinion when it comes to trading with GB as a freelancer? „Just say no“. Which brexiteers might well count as a benefit of Brexit.
What we used to do was just have multiple legal entities to make it easier for the customers.
Wait, are we talking about
[…] having to set up as a freelance […]
or setting up the next Volkswagen AG?

As said: I, personally, would say, don‘t bother. In fact, it‘s what I do say, these days, when recruiters try to poach me for roles in GB. Even though we now have a lovely direct train connection that would make it quite feasible from a logistic standpoint.

I realise that is not helping OP much, so here‘s some advice if you feel compelled to do it, anyway.

First off: find yourself a good accountant. Locally. Your accountant should be able to find, or already be in business with, a counterpart in GB. Good accountants are worth their weight in gold. Mine sends me bills that make me think, „WHAAAAAAT??!!“, them he sends stuff to the tax man, who then gives me back orders of magnitude more than the accountant billed me, and I am once again convinced to make use of his services for another year.

Second: put a currency fluctuation stipulation in your contracts. (Or bill in Euros.) It doesn‘t happen often, but I very vividly remember this:

9782-A7-FE-6297-43-C9-A94-A-B203-CC973-B1-D.jpg
 

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