More than 35,000 micro-businesses drawn into Brexit EU VAT net

Date17 May 2017
Posted By

It is estimated that 35,755 UK micro-business selling over the internet into Europe face being drawn into the EU VAT net for the first time following Brexit. Cost could reach €216,000pa to meet this new requirement.

EU VAT exemption will benefit UK e-Commerce businesses

As part of the UK’s membership of the EU, UK-based businesses were allowed to sell goods to EU consumers using their UK VAT number. Normally, this would exempt them from having to register for VAT in each country until their sales hit the annual ‘distance selling threshold’ in each EU Member State. UK sellers once over this threshold must VAT register in each country, file VAT returns and pay local VAT.

EU VAT compliance could cost micro-business up to €216,000 per annum

Once Brexit comes into effect, UK small businesses will lose this threshold, and will have to VAT register in every country where they are selling. The European Commission has estimated in 2016 the cost of this compliance burden at €8,000pa per EU Member State. This could add up to €216,000pa for the EU27.

There are many UK micro-businesses building-up considerable new revenues from EU e-Commerce, which presently comes minus numerous foreign VAT returns and language barriers. Those businesses which are affected will have to weight up the compliance costs against the potential loss of trade. There is an alternative to this new burden, by geo-blocking EU customers to avoid the VAT requirements – but this means an end to EU sales.

If you have any queries or questions, please do not hesitate to contact amavat Europe.
To find out more information please visit