With all the present political upheaval regrading Brexit there is a lot of speculation regarding the UK’s relationship with the EU single market once our exit is concluded. The following notes published by HMRC may help readers understand the present scope of the expression “the single market”.
The Single Market is a term that has applied since 1 January 1993 to trading between Member States. This covers intra-EC supplies of goods.
With the introduction of the Single Market, goods coming into the UK from other Member States are no longer called imports, but are referred to as acquisitions or arrivals. The term ‘import’ is only used for goods coming into the UK from countries outside the EC.
With the introduction of the Single Market, goods leaving the UK to go to other Member States are no longer called exports, but are referred to as dispatches or removals. The term ‘export’ is only used for goods leaving the UK to go to countries outside the EC.
From 1 May 2004, the VAT territory of the EC is made up of 28 Member States.
Liechtenstein, the Vatican City, Andorra and San Marino are not within the EC for VAT purposes.
How supplies between the UK and the EU, and vice versa, are treated for VAT purposes is an extremely complex issue, and will likely become more complex once we exit the EU. Much will depend on the terms – the much publicised “soft” or “hard” Brexit solution.
If you are considering selling or buying goods or services from Member States, perhaps for the first time, we would be happy to clarify your current VAT position.