We will most likely leave the EU on 31 January 2020, but with a transitional period in place up to the end of 2020 (or earlier, or later, or whatever anyone eventually decides). Anyway, the point here is that EU law will continue to apply to UK businesses throughout the transitional period and this includes compliance with all EU VAT law and regulation so there will be no change to the status quo throughout this time. The key date to look out for to plan VAT changes (and everything else) by will be the date the transition period ends. Before then, there will be no changes to VAT from a Brexit perspective.
Once the transitional period ends, the key question will be whether a trade deal has been reached (likely if post-election reaction from all sides is anything to go by) and, if so, what that trade deal is. Here, there are a number of possibilities:
- A trade deal which includes a Customs Union is reached - unlikely given the political commentary but, if so, logically we would remain within the EU VAT area and nothing significant would change for VAT purposes.
- A trade deal is reached which includes specific provisions on VAT (such as, for example, agreeing that the UK will align its VAT system with the EU) - there is no reason to suspect such an agreement at this point other than my own feeling that the Northern Ireland cross border goods issue is significant and the current proposed solutions does not appear to have considered all angles for VAT purposes. We would need to wait to see what deal is reached, or at least the basic blueprints, before commenting much further here.