VAT News

Brexit-UK government to impose VAT and customs duty if no deal can be reached

Following the 2016 Brexit vote, the UK will leave the European Union in  March 2019. Currently, there is free movement of goods across the EU and goods arriving in the UK from other EU member states do not attract any customs duty or import VAT.

The UK authorities have recently released a 14 page document which outlines their plans for the movement of goods following the exit. Whilst confirming that the UK will leave the existing customs union, the document outlines the UK's desire to have a transition period where the current rules continue to apply, followed by a system which seeks to avoid customs processes and unnecessary burdens for businesses, indicating that a system with no import VAT or customs duty for goods arriving from the EU would be preferable.

However, the UK has indicated that if such a deal cannot be agreed upon by the time of exiting the European Union, an imposition of customs duty and import VAT on goods arriving from the EU would occur.

Such requirements could impact heavily on cashflow for businesses, and also provide an irrecoverable customs duty burden.

Related articles

Why overlooking the VAT determination process is detrimental in the era of tax digitalisation

As tax moves into the digital world, hundreds of thousands of organisations across Europe will face substantial challenges when it comes to adhering to VAT.

Read more
Infringement Proceedings Brought Against Germany Over E-commerce VAT Rules

The European Commission decided to initiate formal infringement proceedings against Germany over section 22f & 25e of the German VAT Act.

Read more
HMRC Issue Letters on No-Deal Brexit Advice For UK Businesses Trading within the EU

HMRC letters to VAT-registered businesses trading with the EU explaining how to prepare for changes to customs, excise and VAT if the UK leaves the EU without a deal.

Read more