Recovery of input tax on financial and insurance services after Brexit

New position from 1 January 2021

Businesses supplying financial and insurance services to EU businesses will be able to recover input tax attributable to these services. While this change had been expected following draft legislation published last year, its confirmation is good news for UK businesses in the financial and insurance sectors, and ensures they will be on par with other non-EU suppliers. Specified services supplied to non-EU customers will continue to benefit from the current rules.

What should you do?

If you provide financial or insurance services, you should consider how these changes will affect you from 1 January 2021 and where appropriate, review your current VAT accounting processes - in particular the VAT recovery method used for attribution of costs associated with these supplies. It should be noted that these changes apply only to specified supplies, not all financial services, and you should seek specialist VAT advice where necessary.

To find out more or to confirm the extent to which you might be affected by the change, please get in touch with your regular contact at Buzzacott or a member of our VAT team by filling out the form below.