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EU VAT Charges change from 01.01.2021

They relate to an HMRC change in the use and enjoyment rules due to the UK leaving the EU

Currently, UK customers using telecommunication supplies within the EU are subject to 20% VAT. Once we have left the EU, the VAT rate for EU telecommunication supplies will change from 20% to 0%.

The opposite side of this is that EU customers using telecommunication supplies within the UK will now be charged 20% VAT where they have not been previously.

Where the Domestic Reverse Charge (DRC) applies to supplies, this will override the above charges, so any changes currently accounted for under the DRC will remain unaffected.

Due to late landing calls, you may see scenarios where it appears both the old and new rules are in force. Don’t be alarmed as although they will initially be presented as DRC at 20% for EU use, the DRC rate of 0% will be correctly applied at the point of bill run.

See below for EU VAT Changes table

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EU VAT Changes

Current Rules - sales

Telecoms Service Charges To Businesses UK use EU use Non-EU use
UK Address 20% 20% Outside of Scope
EU Address 0% 0% 0%
Non-EU Address 20% Outside of Scope Outside of Scope

After Brexit - sales

Telecoms Service Charges To Businesses UK use EU use Non-EU use
UK Address 20% 0% Outside of Scope
EU Address 20% 0% 0%
Non-EU Address 20% Outside of Scope Outside of Scope

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