A 'Hard Brexit'? - 4 Business Types That Need To Start Planning
If you export goods to mainland Europe, or are planning to, you might be in one of the four business categories that need to plan ahead for a ‘Hard’ Brexit, i.e. the UK leaving the EU Customs Union.
There has been a lot of talk in the media about the UK’s future relationship with the EU Customs Union post-Brexit. Surprisingly there has been very little mentioned about the potential impact that VAT will have on UK exporters sending goods to the remaining EU member states once the transition period ends. This transition period, negotiated between the UK and the EU and included within the recent Withdrawal Agreement, extends from the Brexit date of 29th March 2019 to 31st December 2020.
Should the UK leave the EU Customs Union on 31st December 2020, totally or partially, then the UK may also leave the EU VAT system and the EU Excise Movement and Control System (ECMS).
From 1st January 2021 all goods entering the EU from the UK could be subject to import VAT at the prevailing rate. Every EU member state has a different VAT system, from different VAT rates for different types of goods through to different sales thresholds above which exporters will be required to register for VAT in that country. Remember VAT is an important revenue source for all EU countries!
Furthermore, of the 27 remaining EU member states, 19 require the services of a licensed Fiscal Representative to process the required documentation and properly account for the import VAT.
Newcorp Logistic BV of the Netherlands are licensed Fiscal Representatives and their CEO, Jasper van Luik, is giving a talk on the perils of ignoring the risks of a ‘Hard’ Brexit come the end of the transition period. Jasper will explain how companies such as Newcorp can ensure the exporter remains compliant with all EU countries’ authorities, especially if you run one of these four types of businesses;
Business to Business – strategically, who should pay the import VAT, you or your customer?
Excisable produce manufacturers – how can you defer the duty payable as well as the import VAT?
eCommerce – online traders, how do you avoid the significant penalties being imposed for non-compliance with the EU’s country specific VAT regulations?
Commodity traders – do you want to risk your clients discovering the identities of your suppliers?