Finance

The Practical Impacts of Brexit on Meetings

For his second contribution to Boardroom, Oumar Counta, Director of the Tax Department at BC&A, a VAT consultancy firm specialized in managing and recovering VAT for association events, explores the impact of Brexit on VAT regulations… and what it means for event professionals.

The United Kingdom’s withdrawal from the EU, the Single Market and the Customs Union have consequences that impact the meetings industry with its movements of goods and peoples. Brexit, indeed, has affected UK residents going to the EU and EU residents going to UK equally. Let’s review the main changes that have had an effect on businesses and participants involved in business events.

Concerning VAT refund requests:

For UK businesses going to the EU

If a UK company has had expenses in EU countries subject to local VAT and want to ask for refund, the process has changed. It now falls under the 13th VAT Directive for the Non-EU Businesses. UK businesses cannot ask for refunds through their own administration website any longer. They now have to send their VAT Refund Requests to each EU administration where their expenses happened.

The second consequence is that for some EU administrations, the VAT Refund Request will only be possible through a local Tax Representative. In some other EU countries, the nomination of a Tax Representative is, however, not mandatory. 

For EU businesses going to the UK

When EU companies have had expenses subject to British VAT, they can ask for refund. As the nomination of a UK-based Tax Representative is not mandatory, they can do it themselves. But they cannot send their British VAT Refund Request through their own tax administration website anymore. The request must now be sent directly to the HMRC.

Concerning VAT registrations:

For UK businesses going to the EU

UK companies that want to have commercial activities in the EU may have to register for VAT in each of the countries they want to operate. Before Brexit, the VAT registration of UK companies could be direct. Now, in most of the EU countries, the nomination of a Tax Representative is mandatory. Also, a bank guarantee can be asked by the Tax Administration of these countries. UK companies registered in these countries before Brexit may have the obligation to appoint a Tax Representative to continue to operate in some EU countries. The direct VAT registration stays unchanged in some countries.

For EU businesses going to the UK

EU companies that have commercial activities in the UK have to register for VAT in the country. As it is not mandatory to appoint a Tax Representative in UK, the VAT registration can be direct. The Brexit does not bring any change on the matter for EU businesses. Those that registered for VAT in the UK before Brexit remain so without any additional process.

Regarding One-Stop Shop (OSS) for goods and services:

This process allows businesses selling goods and services within the EU to register for VAT in only one member state, instead of having to register in each country where goods or services are offered.

For UK businesses going to the EU

When it was a EU member, UK was also part of the One-Stop Shop process. At the time, UK businesses were able to declare and pay the VAT collected on their sales in other EU countries to their own tax administration. Now they have to register for VAT in an EU country to be able to use this process. 

For EU businesses going to the UK

As UK is no longer part of the One-Stop Shop process, EU businesses selling goods and services within the UK have to register for VAT in the UK. It is no longer possible to declare and pay the British VAT through their own EU tax administration.

For non-EU business

Non-EU businesses that used the OSS by being registered for VAT in the UK are no longer able to do it. They must register for VAT in a EU country.

Concerning telecommunication:

For UK businesses going to the EU

The EU’s roaming regulation allows people travelling in the European Economic Area (EU countries plus Norway, Iceland and Liechtenstein) to make calls, send texts and browse the web using their regular plans at no extra cost. This is no longer applicable to UK citizens. Now, before travelling, they have to check with their operators if extra charges are applied.

For EU businesses going to the UK

It will be the same for EU citizens going to the UK. They will have to check with their operators if extra charges will be applied – before travelling.

Concerning the official documentation to travel and work:

For UK businesses going to the EU

To travel: British citizens are covered by a Schengen visa waiver. This means they do not need to apply for a Schengen visa to visit EU countries for up to 90 days within a 180-day period (that can include leisure tourism and some business activities, like attending meetings). A valid passport is enough.

To work: UK citizens can still work in the EU but they do not have an automatic right to do so. UK citizens now need to make sure they meet the immigration rules of the EU member state in question. They need a work permit and, in most cases, also require a job offer before they can obtain their visa.

For EU businesses going to the UK

To travel:  Individuals are able to enter the UK and participate in business-related events such as conferences and meetings without a visa and can stay up to six months there. Whereas the entry was possible with a simple EU ID, a valid passport is now required. 

Founded in 2004, BC&A is a VAT consultancy firm specialized in managing and recovering VAT for association events. BC&A has been involved in hundreds of events, some with as many as 25,000 participants. Its expert guidance allows for several advantages: maximum recovery for the organizer and the participant, no local VAT registration required, and expedited reimbursement in Europe.

To work: Although individuals can enter multiple times, they are not eligible to ‘live’ in the country. In most cases, if you are in the UK for a short amount of time, you are not allowed to work. There are, of course, exceptions, including if you’re in the UK for a meeting or convention, or to install or maintain equipment. To live and work in the UK you must meet some specific requirements of the British immigration system. This is not applicable to EU citizens that were living and working in the UK before Brexit. They may continue to live and work there but they need to have settled or pre-settled status.

Regarding VAT and the ‘use and enjoyment’ rule

For UK businesses going to the EU

UK businesses and other non-EU businesses trading with customers in the EU, or where services are offered in the EU, need to assess whether there are use and enjoyment rules in each member state they operate. The UK supplier may be required to register for local VAT in those EU member states they work.

For EU businesses going to the UK

EU businesses will also need to consider whether specific EU and UK Laws apply when selling services “used and enjoyed” in the UK to non-UK customers or services “used and enjoyed” in the UE to UK customers.

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