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Outlook on Brexit

While politicians continue to wrestle with post-EU trade and customs options, only one thing is for sure. Whatever the picture after March 2019, change of some kind is on the way.

Depending on the ultimate agreement, UK businesses that trade with EU countries, or import goods from the EU to carry out their UK trade, may become subject to customs duties and VAT.

It’s not just costs, but bureaucracy. At present, 96% of goods arriving from EU countries are cleared through customs in 20 seconds. If consignments are held up in future because of bureaucracy (intended or otherwise), that will have a big impact on businesses who find they can’t get their goods to the factory or the supermarket shelf on time.

Scope out the impact now

While most big corporations made contingency plans soon after the Brexit vote, many smaller firms have been waiting (and waiting) for clarity. But every business owner should map out their own ‘Plan B for Brexit’ right now. Businesses must plan for a worst-case scenario. 

For example, an SME that imports goods into the UK for EU sale may look to set up a subsidiary somewhere in the EU where it can drop-ship goods, missing out UK border controls and levies.

Who claims VAT?

Another positive action is to look at current contracts with EU partners. If trading does become subject to customs duties and import VAT, you might need to change your contractual terms and so move some of the ‘tax’ burden.

For example, if you trade with a German business, for example, but you’re not VAT-registered in Germany, then your contractual terms may need to specify that the customer is the importer.

There’s plenty to consider – but help is at hand. I head up a team of experts looking at post-Brexit indirect taxes as part of the Geneva Group International, the leading global alliance of independent professional firms. I promise, we’re tracking developments so we can help our clients navigate the changes.

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About the author

Steve McCrindle

Steve leads our VAT practice in the Greater London region. He started his career with HM Revenue & Customs, then moved to practice and developed a huge amount of specialist VAT knowledge. As the system has become more complex, he has become an expert in the legislation surrounding this area of tax.

Steve is very active within Geneva Group International (GGi), the firm’s global alliance of accounting, consulting and law firms. He is the Global Chair of the GGi VAT and Indirect Taxes practice group. He advises on global VAT matters and is a regular speaker at GGi conferences globally.

Steve provides advice that gives comfort where there are doubts, remedies where there are issues and VAT savings where there are opportunities, to the whole spectrum of owner managed businesses and charities.

 

What I enjoy most about my role is resolving business’s VAT issues and in doing so, adding value. Unlike some services, VAT consulting is not a mandatory requirement, so when a client works with me it’s because they have an issue, usually with a big financial impact, that they trust me to resolve.

If I wasn’t doing this I’d be: researching and writing novels based on historical events.

Favourite Sports Team: Newcastle United.

Dream Location: Dhara Dhevi Hotel in Chaing Mai, Thailand.

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