The Government and HM Revenue & Customs (HMRC) have updated their collection of high-level guides called “partnership packs”, intended to help businesses involved in importing and exporting prepare for changes to customs procedures after 29 March 2019 in the event of a ‘no deal’ scenario.
If the UK exits the EU without a deal, UK businesses will have to apply customs, excise and VAT procedures to goods traded with the EU, in broadly the same way that already applies for goods traded outside of the EU.
In the event of a ‘no deal’ Brexit the Government’s aim will be to keep VAT procedures as close as possible to what they are now. This will provide continuity and certainty for businesses.
However, there will be some specific changes to the VAT rules and procedures that apply to transactions between the UK and EU countries.
Postponed VAT accounting for imports
The government has announced that, in the event of a ‘no deal’ Brexit, it will introduce postponed accounting for import VAT on goods brought into the UK.
This means that UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, rather than paying import VAT at or soon after the time that the goods arrive at the UK border. This procedure will apply both to imports from the EU and non-EU countries.
Low value consignments
If the UK leaves the EU without an agreement, VAT will be payable on goods entering the UK as parcels sent by overseas businesses. Low Value Consignment Relief (LVCR) will no longer apply to any parcels arriving in the UK. For parcels valued up to and including £135, a technology-based solution will allow VAT to be collected from the overseas business selling the goods into the UK.
VAT mini one stop shop (VAT MOSS) will come to an end
A further change if the UK leaves the EU without an agreement is that the UK will stop being part of EU-wide VAT IT systems such as the VAT Mini One Stop Shop which currently simplifies VAT reporting for UK businesses.
Whether you are in business as an individual or as a corporate, you will want to ensure that you pay no more tax than you are legally bound to do. Our experts at Beavis Morgan can ensure your tax affairs are as efficient as possible to fit your circumstances, and we can look ahead to retirement and inheritance tax planning.
For more information and to discuss your tax affairs in further detail, please contact your usual Beavis Morgan Partner.