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19/04/21

How has leaving the EU changed VAT for NHS organisations?

Liaison Financial

The UK voted to leave the European Union (EU) in 2016, and officially left the trading bloc on 31st January 2020, triggering a series of changes for individuals and businesses alike.

Whilst domestic VAT rules remain the same following the end of the transition period for the UK’s departure from the EU, VAT rules relating to imports and exports to and from the EU have changed. For NHS finance teams, it is important to be aware of those imports or purchases which may be affected by VAT changes in order to ensure both compliance and maximum VAT recovery.

As a result of leaving the EU, there are three potential compliance requirements for the NHS which may need to be considered when buying goods from the EU; 1. Making import declarations, 2. Paying import VAT to HMRC (postponed VAT accounting), and 3. Import duty. These requirements now apply to imports from both the EU and worldwide, and you can read more about them in our previous article here. Further, special rules and procedures apply to, amongst other categories, goods moving to or from Northern Ireland, controlled or licenced goods and consignments with a value of £135 or less.

The guidance for the changes is detailed and complex, and may leave NHS teams struggling to work out the changes affecting their organisations. If this is the case, Liaison Financial’s Head of Tax Services, Kenny Lee, has the following advice: “Navigating VAT can be extremely tricky for NHS organisations, especially when changes have been enacted whilst finance teams are working from home during the Covid-19 pandemic and are therefore unable to work together to understand what needs altering to ensure maximum VAT recovery for their trust or health board’s activities.

“We have developed an interactive training course on the recent VAT changes for this very reason – to allow teams and individuals to get to grips with the changes for wherever they are currently based, meaning that knowledge is kept up to date and the changes can be seen in real and relatable examples.”

To find out more about our full CPD-accredited training course on this subject, please get in touch at info@liaisongroup.com, or click here for details of the other VAT webinars provided by Liaison Financial.