Guest blog by Centurion VAT Specialists - a Xeinadin company
Whilst the end of the transition period, or Brexit as we call it, was not meant to bring a great deal of change to the supply of services there have been some bits of “tinkering” in liability changes in the Financial and Insurance service sector which are important to note.
They are very specific in their application, but the end result is that businesses involved in these activities will now be able to recover more VAT incurred on their costs than they would been allowed in the period to the 31 December 2020.
The nature of the affected services are as follows:
- financial services supplied to persons belonging outside the UK or directly related to an export of goods
- insurance services supplied to persons belonging outside the UK or directly related to an export of goods
- the making of arrangements for these specified supplies
These will need to be services supplied to a person who belongs outside the UK but as noted the benefit for such businesses will be that for costs incurred from the 1 Jan 2021 you will be entitled to recover as input tax, VAT incurred on costs relating to the provision of these services. The link to the HMRC commentary is here .
For those businesses operating in this area there may be changes to a Partial Exemption Special Method to consider as a result as well and with the impact of CV19 on trading patterns it would be worthwhile checking whether a temporary change to any Partial Exemption method you use would be a further benefit to consider.
Guest Blog by Centurion VAT Specialists – a Xeinadin company
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