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The UK exit from the EU and VAT implications

The basics

If you make taxable supplies (standard rated, reduced rated or zero rated), you have to account to HMRC for the VAT due. This is output tax. You’ll normally charge the VAT to your customers. If your customers are registered for VAT and the supplies are for use in their business, the VAT is their input tax. In the same way, VAT charged to you on your business purchases is your input tax. As a registered person, you can reclaim from HMRC as much of the VAT on your purchases and imports, as relates to the standard rated, reduced rated and zero-rated supplies you make. In principle, you can’t reclaim VAT which relates to any non-business activity or to any exempt supplies you make.