So having had lots of emails telling me how to export goods to the EU in the event of a no-deal Brexit, I tried once again to find out what happens to tax arrangements for people who export services. I’m by no means the only UK person in this situation. Please note I do not expect them to have all the answers, however it would be nice to know if this issue has been discussed, what to do if there’s no deal, etc. I think I am right to want to know how to conduct my business after Brexit, especially given the government, etc. reports detailing the horror of companies NOT being prepared! (Financial Times reports, for example)
Here is my somewhat Kafkaesque conversation over live chat with a representative of HMRC (I checked and it is OK to share this, see below).
[Note, I seem rude to start without saying hello but you’re told to enter your question first!]
LIZ DEXTER: Are the reciprocal tax arrangements between the EU and UK going to continue?
Additional detail: I provide services to EU clients. Currently, I only need state I pay self-assessment taxes to HMRC in the UK, or occasionally need to provide my UTR to prove this, in order for companies to pay me my full invoice and not tax me at source. However, some countries insist on further
paperwork (e.g. a client in Lithuania asked me to get an HMRC employee to sign a letter for them stating I paid tax in the UK). Is this situation being
monitored over the time of Brexit and how can I find out what’s happening?
HMRC: Good afternoon
LIZ DEXTER: Note: I have signed up for all the email alerts, but they are solely about companies that export and import goods, not services. There’s nothing I can find having read the WTO rules which we revert to with a no-deal Brexit. And hello.
HMRC: There is no further information I can give you regarding leaving the EU other than what’s available on gov.uk
LIZ DEXTER: There’s no information on gov.uk about this specific situation that I can find. Can you point me towards any information for exporters of services, not goods, please?
The reason I ask this is that the Ease of Doing Business if I have to get an HMRC employee to sign a paper for every client I had will badly adversely affect my business (and the tax I’ll pay in the UK!).
HMRC: Give me a moment whilst a check my guidance.
LIZ DEXTER: OK thank you.
HMRC: I don’t have any guidance I can give you. It just tells me to direct you to guidance published on gov.uk
LIZ DEXTER: Which doesn’t have anything to do with exporting services at all. OK it’s not your fault but can you please feed back that there are so many people in my position, I have EU customers asking me how they’re going to deal with me post-Brexit, whether they can continue to use my services. It’s embarrassing and very stressful. Or HOW they can continue to use my services.
LIZ DEXTER: Is it permissible to share my download of this chat with other self-employed people or my clients?
HMRC: I will feed that back. Sorry but at this time we don’t have the information you require.
HMRC: Yes that’s fine.
LIZ DEXTER: Thank you. And I appreciate your help and that
you’ve done all you can.
REFERENCE: Record of your HMRC webchat [url redacted, can be provided upon request]
Ranee Boyd Tomlin
March 28, 2019 at 3:02 pm
Liz, we’ve been watching and wringing our hands from the States. We’re very concerned for businesses and residents there, and reading this chat log made us put our heads in our hands and moan in despair. We certainly have our own painful messes here, but the confusion and direct impact of this on everyday folk in the UK and the rest of Europe seem stressful beyond comprehension. Please know we’re in deep sympathy.
March 28, 2019 at 3:04 pm
Thank you – that does really help. A lot of people don’t realise about this stuff which is why I chose to share this today.
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Jane @ Beyond Eden Rock
March 28, 2019 at 3:31 pm
As someone who works in finance and shipping for a company that imports goods from Europe and sells goods and services worldwide I can sympathize and I can tell you that I am not at all surprised. HMRC is desperately short of resources,its staff haven’t much more idea about what is happening than we do, and a lot of the guidance was written for dealing with the rest of the world while part of the EU, and so it may or may not apply if the worst comes to the worst. I have sat through two webinars for exporters of goods, and when people asked about services they were simply told that services weren’t being covered.
My best suggestion is to apply for a certificate of tax residence. As a self-employed individual I believe that you can apply online, and when it arrives it can be scanned and send out to your customers. I’ve had to do that for India, Russia and a number of states that used to be part of the USSR in recent years.
March 28, 2019 at 3:32 pm
Oh, that’s super-useful, thank you so much! I will look into that for sure. And thank you for your confirmation that they’ve not done anything for services. I can’t believe I’ve even read through the WTO rules for it!
March 29, 2019 at 1:28 pm
Reblogged this on Funnylass's Blog and commented:
As someone surrounded by folk who run small businesses and are involved in exporting – this is perhaps one of the least ‘funny’ blogs to appear here. Thanks to Liz Dexter for flagging this up…
March 29, 2019 at 1:38 pm
Thank you for sharing!
March 29, 2019 at 2:17 pm
Thank YOU for all your helpful advice!
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