Tax Considerations for post-Brexit UK:

Leading up to Brexit, many businesses found themselves up against the clock. Getting ready for the changes that would take place was no easy task. It was a task made more arduous by the prospect of a trade deal going right up to the wire. It certainly wasn’t easy to discern the full set of measures that business would need to consider. What was certain though was that the UK would no longer be in the single market and customs union. So, it was inevitable that there would be tax considerations post-Brexit. Here’s a look at what we know so far!

Post-Brexit Tax Consideration 1: Customs Compliance

Many business processes involve transporting goods between the EU and the UK. So, it’s unlikely you will have failed to notice what a contentious topic this was in the Brexit talks. The outcome was inevitably that there will be more advanced customs compliance obligations post-Brexit. Even with a Free Trade Agreement in place, transporting goods will be considered as imports and exports. From 1st January onwards, the EU will be implementing full border control. So, any goods exported from the UK will need to meet all EU requirements before they are allowed. You can, though, defer import declarations and associated duty payments, on a wide range of goods, until 1st July 2021. 

Post-Brexit Tax Consideration 2: Changes in VAT Law

As you might have expected, there will be a number of VAT law changes. These are likely to be sector-specific. We know, for example, that the treatment of VAT on certain financial services will be impacted. We also know that EU businesses supplying those in the UK will be eligible for increased VAT recovery.  Travel businesses can also expect changes. Currently, it is believed that the tour operators’ margin scheme will be amended. The thinking is that VAT will only be paid on the margin on UK holidays, and not EU ones. More generally, import VAT will be payable on the transfer of goods between the UK and the EU. 

Post-Brexit Tax Consideration 3: Tax Systems and Data changes

When considering Post-Brexit tax considerations, changes are likely to have a knock-on effect. This is all the more true when those changes are to customs compliance and VAT. So, do consider the ramifications on the reporting systems and processes that your business uses. They are likely to be impacted. Each business will have a unique set of challenges surrounding Brexit. So, do take care to fully assess your business and make any changes necessary. As always, if you are in any way unsure, please do seek professional advice by contacting us on 01243 767 469. We are always happy to see how we can help!

Written by Ian Barnett

Ian is an experienced Chartered Financial Planner as well as being a Fellow of the Personal Finance Society, with over 25 years’ experience in the financial services industry.  With a broad range of client experience and expertise, Ian specialises in financial matters from Pre-Retirement Planning to Inheritance Tax Planning and all points in between.

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