If you operate a business which is selling goods or services from the UK to Europe or from Europe to the UK, it is important that you familiarise yourself with the changes in the rules and procedures relating to VAT, which will come into force in the event that the EU and the UK do not achieve a Brexit deal.
Tomorrow, 31st August 2019, there will be 2 months to Brexit. The UK is currently scheduled to leave the EU at 11:00pm GMT (midnight CET) on 31st October 2019. In a series of articles, we are exploring what will happen or is likely to happen in the event of a “No Deal Brexit”.
According to UK Government statistics, the EU, taken as a whole is the UK's largest trading partner. In 2018, UK exports to the EU were £289 billion (46% of all UK exports). UK imports from the EU were £345 billion (54% of all UK imports).
The top 10 export markets for UK goods and services in 2018 were USA (18.6%), Germany (8.7%), Netherlands, France, Ireland, China, Italy, Switzerland, Belgium and Spain (2.8%).
The top 10 import markets for UK goods and services in 2018 were Germany (11.6%), USA (10.9%), Netherlands, China, France, Spain, Belgium, Italy, Ireland, and Norway (3.3%).
The UK Government has prepared a series of Guidance notes on a range of matters in order to assist UK and other businesses and individuals. The Guidance notes on “VAT for businesses if there’s a no-deal Brexit” have been updated today (30th August 2019). They provide guidance as to what importers need to do to prepare for the changes in the VAT rules and procedures if there is a no deal Brexit. They include information on matters such as accounting for import VAT on goods imported into the UK, VAT on goods entering the UK as parcels sent by overseas businesses, VAT on vehicles imported into the UK, UK businesses exporting goods to the EU, UK businesses exporting goods to EU consumers, UK businesses exporting goods to EU businesses, UK businesses selling their own goods in an EU member state to customers in that country, and UK businesses supplying services into the EU. The Guidance notes also contain links to various related matters. The full text of the Guidance notes can be found here - https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal
If you are affected by the Guidance Notes, you may wish to reconsider and/or reorganise your existing trading structure (whether it be through an agency, distribution, licensing or other commercial structure or through a branch, subsidiary or other corporate structure) or review and/or renegotiate your existing trading and supply chain agreements, distribution agreements, agency agreements and related matters.
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Whatever stage of the Brexit assessment process you have reached, we can help you to understand the different legal and related commercial issues relating to Brexit, to choose the option that is right for you and to help you develop or minimise risks for your business.
If you would like more information about the effects of Brexit or would like to discuss its effect on you, please contact us by telephone on +44 (0)20 3126 4520 or +45 38 88 16 00 or by email at email@example.com
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