The UK formally left the EU, on 31 January 2020. This did not result in any immediate seismic events resulting from the UK’s exit from the EU. For now, there is no significant change in how UK businesses account for VAT on trading with the EU. The reason for this is that the UK has now entered in to an agreed transition period where, for trade purposes, the UK will remain part of the EU until 31 December 2020.

However, this interim period should be used to put in place required contingency planning in regard to the steps to be taken post Brexit and particularly the pending 31st December 2020 deadline for exit from existing EU VAT arrangements.

How far the UK deviates from the existing EU VAT regime will be dependent on the UK’s negotiations with the EU throughout the transition period. Thereafter, any changes to the existing VAT regime will be implemented.

Although there is no immediate requirement for IE and/or UK businesses to change the existing VAT procedures applying to trade with the EU and UK, there are steps that IE and UK businesses can take over the next few months to prepare themselves for the eventual exit from the EU trading structures on 31 December 2020.

If you are an IE and/or UK business currently trading with the EU, you should give thought to planning for the following:

  1. Consider your existing supply chain with EU and UK suppliers/customers and identify. In the event of a no deal with the EU, who will be responsible for the import of goods into the EU or UK?
  2. Contracts with current EU and UK customers. What are the delivery terms in the event of a no deal? Existing contracts that stretch beyond 31 December 2020 should be appraised to consider the implications.
  3. Will there be a requirement to register for VAT in an EU state and/or the UK?
  4. Without a customs deal between the UK and the EU, businesses will have to develop customs expertise either by hiring specialist staff or using a customs agent.
  5. Ensure your business has applied for an EORI (Economic Operators Registration and Identification) number. This will be the business’s unique number to be quoted on import and export documentation. Consider the impact on existing EORI arrangements for goods movements as it will no longer be possible to passport and use an existing EORI when trading with the UK.
  6. Consider whether obtaining AEO (Authorised Economic Operator) status would be beneficial to the business.
  7. Examine your accounting systems to establish if the current systems are tailored to cope with a change in procedures such as changing from intra-community transactions to imports/exports between IE/EU, the UK and third countries.
  8. Consider potential import duty/VAT cash flow issues by use of a “duty deferment account” or postponed accounting (import VAT accounting via VAT return).

There will be intense negotiations between the UK and the EU throughout the transition period. Although, within the Withdrawal Agreement, the UK Government agreed with the EU that the transition period can be extended to 2022, a request for an extension must be made by July 2020.

Whether such an extension will be requested is dependent on the UK Government’s ability and/or appetite to conclude all negotiations, with or without a deal, by December 2020. In practical terms given the commentary to date from the EU and experience on the length of time involved in putting such international trade agreements, the likelihood of having a deal in place by the end of 2020 is unlikely. 

Staff Member




Frank Greene

Tax Partner


01 449 6415

Alan McManus

Tax Director


01 512 5525


February 2020