Brexit – How will it affect your business?
On 21st March, EU leaders offered to delay Brexit until 22 May if MPs vote to approve Mrs May’s deal next week. If the deal is not approved, the delay will be until 12 April when either the UK leaves without a deal or must set out a plan to the EU on its next steps.
What impact does Brexit have on business?
The biggest impact for many businesses will be in relation to VAT and duties. In the event of a hard Brexit it has been announced there will be postponed VAT accounting for imports. This essentially means that import VAT will not be physically payable on goods entering the UK, instead it will be accounted for on the VAT return in much the same way reverse charges are. Import duties will still be payable, however, the government have announced that some 87% of imports from the EU will not be subject to duties.
Unfortunately, the EU is not reciprocating. If we leave without a deal it is expected that VAT and import duties will be payable in respect of goods moving from the UK to other EU member states. This could create significant complications for businesses that sell goods to the EU, particularly consumer sales.Read more on import duty post Brexit
One action, in particular, we would recommend is that all businesses with any EU trade undertake is EORI registration. Post-Brexit an EORI registration will be required to import goods into the UK coming from Europe, or indeed transporting goods from the UK to Europe. Registration is very quick and easy to apply for, particularly for VAT registered businesses, so it is worth applying for even if it doesn’t get used. We can do this on a client’s behalf.
No deal checklist
Whilst it is difficult to properly plan for Brexit without knowing what deal (or not!) the UK will get, there are steps businesses can be taking now to identify some of the potential challenges they may face. We have put together a checklist of things that businesses may wish to consider, just in case the UK does leave without a deal. This will be particularly applicable for businesses that trade with the EU.
If you wish to discuss how Brexit may affect your business, or for a copy of the checklist, please fill in the form below.