The UK is due to leave the EU on 29 March 2019
Businesses that sell and buy from the EU need to have contingency plans in place before 29 March 2019 and they will need to be sufficiently flexible to cope with a variety of possible unknowns.
When the UK leaves the customs union, goods moving into or out of the UK will be subject to customs checks, customs declarations and duty rates negotiated with EU or non-EU countries. In the absence of specific trade agreements with the UK’s trading partners, the default position would be for the World Trade Organisation (WTO) to apply its own tariffs. UK businesses who have not prepared for the possible absence of trade agreements with the EU in particular could be faced with unanticipated costs, and supply chain dilemmas which may create vulnerabilities for their business within the post-Brexit landscape.
The biggest VAT impact will be the change to Intra-EU trade. At the moment, business to business transactions are zero-rated for VAT purposes. Post-Brexit, such sales will be imports into the EU and subject to EU VAT, which has a number of potential consequences. On the plus side, there will be no more Intrastat or EC sales lists for UK businesses to complete.
Authorised Economic Operator Status
The EU Authorised Economic Operator (AEO) scheme is a voluntary system which was introduced to create a system of ‘legitimate’ businesses identifiable within the international supply chain as being safe and secure. It gives quicker access to certain simplified customs procedures and in some cases the right to ‘fast-track’ shipments through some customs safety and security procedures.Read more in our Tax Planning Guide
We pro-actively advise businesses on Brexit planning, including contract review and the most effective place to establish an EU supply chain to take advantage of best practice in the EU. For advice on VAT, customs relief or for any other international query, you can get in touch with one of our team on 01903 234094.