VAT for UK businesses - What will happen in the event of a no-deal Brexit?
With Britain’s impending ‘D-Day’ now just over six months away, UNW’s VAT Manager Ian Coulthard discusses the potential impact a no-deal Brexit could have on VAT in the United Kingdom.
In the biggest vote of a generation, the United Kingdom voted to leave the European Union (EU) on 23rd June 2016. There has been an array of issues and controversies leading up to 29th March 2019, with the very real possibility of the UK exiting without a deal in place.
The Prime Minister this week said that whilst this wouldn’t be ideal, it wouldn’t be the end of the world and Britain would continue to trade.
In the event of a no-deal Brexit, HMRC has published a guide on how it sees VAT being applied by businesses that supply goods and services to and from the EU, which you can find via the link below:
Commenting on the guide, Ian Coulthard said: “Reading HMRC’s recent note, it is clear the intention is for the UK to continue with VAT as a form of taxation, with what appears to be minimal alterations at least in the short term.
“Having said that, one significant change referred to in the note is the possible introduction of postponed VAT account for imports of goods by VAT registered businesses from both the EU and non-EU. This would remove the requirement for those businesses to pay import VAT at the time the goods clear import entry, only to be recovered later via VAT returns.
“All in all, this would be a welcome introduction by HMRC, which would relieve cash-flow for affected businesses and should ease administration. It would be helpful if HMRC could look to implement this regardless of how Brexit looks on 29 March, thereby benefitting businesses importing goods into the UK.”
With two senior members of UNW’s VAT & Customs team having previously worked in high-profile positions within HMRC and local authorities, it is extremely well placed to offer high-quality advice on any VAT issue you may have.