HMRC have updated their partnership pack on GOV.UK to help businesses plan for the possibility of a ‘no deal’ EU Exit.
The third edition of the pack is available to view here: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit.
This pack includes information from, and directs people to, 5 online guides, which provide the information on the steps UK businesses trading with EU need to take now in order to plan for a no deal scenario:
- Guide 1 – Get a UK EORI number to trade within the EU
- Guide 2 – Exporting and importing goods if the UK leaves the EU with no deal
- Guide 3 – Declaring your goods at customs if the UK leaves the EU with no deal
- Guide 4 – Customs procedures if the UK leaves the EU with no deal
- Guide 5 – Moving goods to and from the EU through roll on roll off locations including Eurotunnel.
Included within the partnership pack there is a section providing an update on how VAT for businesses would be affected. Some of the key points provided in the pack are:
- The UK will continue to have a VAT system after it leaves the EU. The revenue that VAT provides is vital for funding public services and the VAT rules relating to UK domestic transactions will continue to apply to businesses as they do now.
- If the UK leaves the EU on 29 March 2019 without a deal, the government’s aim will be to keep VAT procedures as close as possible to what they are now. However, there will be some specific changes to the VAT rules and procedures that apply to transactions between the UK and EU countries.
- In the VAT for businesses technical notice, the government has announced that in a ‘no deal’ scenario 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 on or soon after the time that the goods arrive at the UK border. This will apply both to imports from the EU and non-EU countries.
- If the UK leaves the EU without an agreement, VAT will be payable on goods entering the UK as parcels sent by overseas businesses. The government set out in the Customs Bill White Paper (published October 2017) that Low Value Consignment Relief (LVCR) will not be extended to goods entering the UK from the EU. This note confirms that if the UK leaves the EU without an agreement then LVCR will no longer apply to any parcels arriving in the UK. This aligns the UK with the global direction of travel on LVCR. This means that all goods entering the UK as parcels sent by overseas businesses will be liable for VAT (unless they are already relieved from VAT under domestic rules, for example zero-rated children’s clothing). 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.
- If the UK leaves the EU without an agreement, the UK will stop being part of EU-wide VAT IT systems such as the VAT Mini One Stop Shop. Details for specific EU-wide VAT IT systems is set out in the VAT for business technical notice.
For further details please click here.
This Article was taken from the iab.org website, for the original article please follow this link : www.iab.org.uk