UK VAT after Brexit
The UK left the European Union in March 2020, and the transition period ended on 31 December 2020. As a result, the UK no longer has to follow EU VAT rules. However, the UK has incorporated details of the EU VAT law relating to digital products into UK law.
This article explains our current understanding of how Brexit affects you, based on your location. It also explains how our Easy Digital Downloads EU VAT plugin can help. You should read it alongside the following resources which are updated regularly:
You may also like our in-depth article about what you need to change immediately after Brexit.
This is not legal or financial advice. We recommend asking your accountant for personalized advice on how Brexit will affect your own company.
UK companies
If your company is based in the UK then you must:
- Charge UK VAT on digital products to businesses and consumers in the UK, if your company is VAT registered. This falls under domestic UK tax law rather than EU law. However, for your convenience we have built the UK VAT rate into our plugin so that is taken care of automatically. You must charge VAT to all your UK customers, even if they have a valid VAT number.
- Charge the appropriate rate of EU VAT on digital products to consumers in the EU. For example, if you sell to consumers in France then you must charge them French VAT. The VAT rate for each EU country is built into our plugin, so this is taken care of automatically. Our plugin will also allow EU businesses to enter their VAT number and have the VAT reverse charged.
- Send separate tax returns for the EU VAT and the UK VAT that you collect. Learn more about how to register for EU VAT after Brexit.
Companies based in the EU
If your company is based in an EU country (i.e. not the UK), then you must:
- Charge UK VAT on digital products to businesses and consumers in the UK. This is because while the UK has left the EU, our understanding is that the UK is adopting the ‘place of supply’ rules into UK law. This means that you must charge UK VAT to consumers based in the UK even if you are outside the UK. As a result, we have built the UK VAT rate into our plugin so that is taken care of automatically. UK customers with a valid VAT number can enter this on the checkout and our plugin will reverse charge the VAT.
- Charge the appropriate rate of EU VAT on digital products to consumers in the EU. For example, if you sell to consumers in France then you must charge them French VAT. The VAT rate for each EU country is built into our plugin, so this is taken care of automatically. Our plugin will also allow EU businesses to enter their VAT number and have the VAT reverse charged.
- Send separate tax returns for the EU VAT and the UK VAT that you collect. Learn more about how to register for EU and UK VAT after Brexit.
Companies based outside the EU
If your company is based outside the EU – for example the US or Australia – then you must:
- Charge UK VAT on digital products to businesses and consumers in the UK. This is because while the UK has left the EU, our understanding is that the UK is adopting the ‘place of supply’ rules into UK law. This means that you must charge UK VAT to consumers based in the UK even if you are outside the UK and EU. For more information, please see this link. UK customers with a valid VAT number can enter this on the checkout and our plugin will reverse charge the VAT.
- Charge the appropriate rate of EU VAT on digital products to consumers in the EU. If they have a valid VAT number (which they can enter on the Easy Digital Downloads checkout when you’re using our plugin) then they can have the tax reverse charged.
- Send separate tax returns for the EU VAT and the UK VAT that you collect. Learn more about how to register for EU and UK VAT after Brexit.