The United Kingdom is supposed to leave the EU on Friday 29th March. The date may shift, but the challenges still remain ...
HMRC has released guidance for a no-deal Brexit. Yes, the Government want to make the transition from EU member to 'third country' as easy as possible, so businesses need to act now. If you are an importer or exporter, the biggest change for you in the event of a no-deal Brexit is that the United Kingdom is no longer a member of the EU's Customs Union
If you're sourcing goods from the EU, there will be more paperwork to complete and more checks at the border. There may also be increased customs duties and your VAT cashflow will be affected when you have to pay VAT and duties on entry rather than through your normal quarterly return.The Government has introduced two measures to help reduce the impact of this change:
The Government has also supplemented its new draft customs rules with a transitional simplified procedures regime which is designed to ease the burdens on importers as they ready the new customs processes. If you apply and are accepted, you can clear customs inland and post-import.
Our domestic VAT laws are linked with our membership of the European Union. Some aspects of UK VAT law will be straightforward to untangle, however, a number of areas will have a real impact on your VAT bill.
UK based financial services companies will see radical policy changes to their VAT recovery although it has been suggested they will see an improvement in their VAT position if we leave on no-deal as they can reclaim VAT on exempt transactions within the EU.
UK businesses trading within the EU may need to appoint a representative in the EU to file VAT returns and for paying or reclaiming EU based VAT.
If you are trading goods with EU countries and do not have an Economic Operator Registration and Identification (EORI) number, get your application in as soon as possible and consider applying for AEO status. You can then choose which of the fast-tracks regimes you want to apply for.
And if you recover VAT from EU countries, you should make your 2018 claims before 29th March to avoid this VAT suddenly becoming a cost. Any claims made after the 29th (or whatever date we leave with a no-deal on) will need to be made via an EU representative, as discussed above.
And finally, if you charge EU VAT to customers using the Mini One Stop Shop (MOSS) system should transfer to a non-EU business scheme as soon as possible, registering for one in a European Union member country.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.