We are monitoring Brexit developments very carefully. Although it remains likely that some sort of deal will be achieved between the UK and the EU between now and the 29th March, in light of the government’s vote on 15th January the risk of a no-deal/hard Brexit has increased.
We have been doing plenty of work behind the scenes to ensure we’re prepared for all eventualities. So here’s some more information on what the impact would be for your business, your buyers, and Paddle.
How would a no-deal Brexit affect your relationship with Paddle?
Contract / reseller agreement: No impact on your contract with Paddle as contracts are national rather than supranational. Your contract with Paddle is and will remain governed by UK Law, and although UK Law incorporates aspects of EU law (via Directives and Regulations) these will continue to be in force following a hard Brexit. See this Norton Rose analysis for more detail.
Supplies of software: No impact on sale of software to Paddle and resale to end customers. Under WTO rules, supplies of software fall under the General Agreement in Trade Services (GATS), which means international sales are tariff-free. See this MMC paper on the impact on Brexit on UK tech.
VAT: As Merchant of Record, Paddle takes on responsibility of charging VAT to end customers. Although a hard Brexit would mean that Paddle’s filing requirements would change this has no effect on you as a Seller with Paddle. Your sales to Paddle will continue to be treated as cross-border supplies with no VAT applied. B2C customers will continue to be charged VAT in the EU and the UK (and the 13 other jurisdictions that Paddle covers). See this guidance from the UK Government.
In summary, you will not notice any difference in trading following Brexit. If there were changes implemented by the UK government that occurred after a hard Brexit which did affect trading, then Paddle can transfer all contracts to our entity in Ireland which remains in the EU (Paddle Payments Limited - Irish company number 572448).
If you have any other questions, get in touch with our team.