With the possibility of a no deal Brexit scenario, businesses need to ensure planning is in place to reduce their tax risks and liabilities.
It’s been announced that government will not vote on a Brexit deal until 12th March, increasing the possibility that the UK could leave the EU without any agreement on its exit terms or future trading relationship with the EU or rest of the world.
Unless the exit date is extended or revoked, the UK will leave the EU at 11.00pm (GMT) on 29 March 2019.
All UK businesses currently trading within the EU will undergo significant changes should the UK leave the EU without a Withdrawal Agreement in place. There are numerous areas of concern, and businesses who have not already done so should consider carefully how these may affect their respective operations and evaluate potential solutions.
Major trading changes for UK businesses include:
- Exporters and importers become liable to WTO rate
- EU imports would require completed customs declarations and regulatory compliance
- EORI registration
- Additional EU VAT registrations and potential requirement to appoint fiscal representatives across the EU
- Transitional Simplified Procedures
Many potential issues arise from these changes.
In addition to the increase in statutory reporting requirements and obligations placed on businesses, significant costs could also be incurred. Incorrect classification or valuation of goods entering the UK and the non-application of available reliefs would create an absolute cost to business. Failing to meet criteria for simplification procedures or customs warehousing could place businesses at a significant cash flow disadvantage. Businesses must also consider the need to appoint customs agents and ensure that software and system processes are compatible.
Smith Cooper’s team of Indirect Tax advisers are ideally placed to work with businesses in understanding potential issues arising from Brexit and identifying solutions to mitigate liabilities and risk.
Our Customs Duty and VAT specialists work together to ensure solutions are commercially feasible, as well as mitigating tax costs.
Please do not hesitate to contact a member of our dedicated team should you require any further advice.