Since the 1st of January 2021, UK is no longer considered to be part of European Union for cross-border trading. This means that if you have a business established in France and have commercial relations with UK, you must be aware of the VAT implications for such transactions.

Purchasing from UK

Goods purchased from UK are treated as an import. French VAT is due at the customs and is deductible. You need to get an EORI number, and provide it along with your VAT number to the supplier.

As a general rule, VAT on services purchased from a UK provider must be treated under reverse charges procedure (autoliquidation).

Selling to UK from France

Selling goods

Selling goods from France to UK is now considered to be an export, and not an EU delivery – “livraison intracommunautaire”. The operation is exempt of VAT in France – and UK VAT is applicable. You need to fill out a customs declaration and establish a “DAU (Document Administratif Unique) export” with statut ECS (En Cours de Sortie) mentioning your French business as exporter. This document needs to be kept in your accounting together with the invoice. You also need to get and EORI number, and fill out the customs declaration.

Selling goods B2B

If the value of the goods is over 135£, the buyer needs to communicate their UK VAT number, and your invoice must have a mention «  Reverse charge : customer to account for VAT to HMRC ». If the value of goods is less than 135£, you can either proceed as above, or follow the B2C rules.

Selling goods B2C

If the value of the goods is less than 135£ you have two options:

Either you sell directly, then you need to get a British VAT registration number, charge the UK VAT on the invoice, and declare and pay it to HMRC.

Or you use a marketplace to sell, you do not need to register with HMRC – you still invoice including VAT, but the tax is managed by the market place.

If the value of the goods is over 135£, again two options exist:

Either VAT is collected at the customs and paid directly by the customer

Or the seller takes care of all the custom formalities. In this case, you need to be UK VAT registered, invoice including British VAT, and declare it to HMRC.

Selling services

Selling services B2B

The operation is generally exempt from French VAT. British VAT must be declared by the customer following reverse charges procedure. You need to have proof that the customer is VAT-registered in UK. (Except for transport, transport rentals, services concerning buildings, and services consumed at the place of service – restaurants, hotels etc).

Selling services B2C

The general rule is that French VAT must be applied when providing services B2C, with the exception of:

• transport, transport rentals, services concerning buildings, and services consumed at the place of service – restaurants, hotels

• transporting goods
• cultural, sports, educational events
• works and expertise services on movable items
• intermediary services
• providing immaterial services (selling author rights, trademarks, licences etc; rental services; advertising; council; treating data and supplying information, including translation; financial, insurance and banking services; providing personnel; providing access to gas, electricity, heating etc networks)
• TV, radio and electronic services.

For digital goods/services, UK VAT is applicable from the first sale. You need to register for VAT with HMRC, collect and pay VAT to them.

For virtual events, please read this article.

If you would like a personalised advice on your situation, especially if your case falls under one of the exceptions mentioned above, please do not hesitate to contact me.

Important: Every situation is different and may need professional advice. The information on the Compte Plus website is general and should not replace legal, accounting, or tax counsel. If in doubt, contact a specialist for tailored advice.