Nobody yet knows what the outcome of the Brexit negotiations will be, but if the UK leaves the EU, EEA and Customs Union, Menzies Robert Facer, VAT director at Menzies LLP, believes the future comments on future of VAT after Brexit could spell choppy waters for the UK.
What do you see as the main implications for VAT-registered companies trading with Europe in (a) goods and (b) services?
For companies trading with the EU in services specifically, there is a strong possibility that VAT rules would stay largely unchanged, however, this is not yet known.
After a “hard Brexit”, what changes do you think might be made to VAT in the UK, bearing in mind also the current OTS review of VAT?
Is there anything organisations can or should be doing now to prepare for possible VAT changes post-Brexit?
To continue taking advantage of the benefits of single market rules and avoid EU tariffs, businesses trading in goods with EU countries may wish to consider establishing a European hub or distribution point. Businesses should also think carefully about the potential impact of a hard Brexit on their organisation, taking into account the extent of its importing and exporting activities. Given the current uncertainty surrounding the outcome of Brexit negotiations, it is difficult for businesses to plan ahead much more than this, from a VAT perspective.
What are the biggest issues on their minds and how are they dealing with them?
So what now?
Businesses involved in EU trade of goods should continue keep a close eye on how the negotiations progress, the impact it will have on the ability to compete with EU businesses and the opportunities that it may create with non-EU countries. Menzies will continue to monitor the situation as the negotiations progress and keep you updated on the impact on VAT.
Find more information on UK VAT changes after Brexit.