Brexit: what your clients need to do in FreeAgent to continue to trade with the EU

The UK officially left the EU on 1st January 2021. If you have clients who trade with the EU, here’s what they need to do to make this work in FreeAgent after 1st January 2021.

Clients based in Great Britain

If your clients are based in Great Britain, they will no longer see the ‘EC Goods’ option for either sales or costs of goods from the EU dated after 1st January 2021. This is because these items no longer need to be reported in boxes 2, 8 and 9 of the VAT return. Clients in Great Britain are also not required to fill in an EC Sales List after the start of January.

Instead of acquisition tax being entered into box 2, clients with level 8 access will need to post journal entries to bring any import VAT into boxes 1 and 4 of their VAT return. If clients have FreeAgent access levels lower than level 8, you will need to post these journal entries on their behalf.

Clients based in Northern Ireland

If your clients are based in Northern Ireland, they should continue to use the ‘EC Goods’ option for both sales and costs of goods from the EU and to prepare and file an EC Sales List.

All clients

For all clients, any sales of non-digital services to consumers in the EU will be outside the scope of UK VAT, rather than subject to UK VAT.

Don’t forget that any clients registered for the UK VAT Mini One Stop Shop scheme (MOSS) will need to de-register and re-register for MOSS in an EU country to continue to use the MOSS service.

We’ve also changed the ‘EC Services’ setting to ‘Reverse Charge’ so that it can be used for sales and costs both within and outside of the EU.

Don’t forget that any clients registered for the UK VAT Mini One Stop Shop scheme (MOSS) will need to de-register and re-register for MOSS in an EU country to continue to use the MOSS service.

You and your clients can find out more on our Knowledge Base.