A recent survey by European VAT specialist, Accordance, found that many businesses (over 80% of respondents in a recent survey) foresee difficulties in European trading once the UK is outside the existing customs and VAT systems. Alarmingly despite this concern over 60% of respondents admitted that whilst they had considered how Brexit would impact their businesses’ VAT position, they had no strategic plan in place.
Asked what was the area of their business that they were most concerned about the consequences of Brexit, the respondents replied:
- 25% supply chains
- 23% import VAT
- 21% fiscal representation
- 15% Triangulation
- 8% VAT recovery.
In March 2019 the UK will cease to be a member of the European Union with Tory MP Anna Soubry tabling a cross-party amendment to the Trade Bill in an attempt to force the Government to retain a customs union with the EU, which could force this amendment through Parliament. Interestingly of the businesses surveyed by Accordance 38% did not think the UK would form a customs union with the EU. Both outcomes will create considerable complications for businesses dealing with cross border VAT, where billions of VAT goes unrecovered.
Nicholas Hallam, CEO of Accordance comments, “It is clear from these survey results that UK businesses are aware but not prepared for the changes ahead. Working with companies such as Accordance can help businesses to consider their VAT position and develop a strategic plan for the complex issues around Brexit and the difficulties of trading with Europe once we are outside the current VAT systems.”