It’s a difficult time for many companies, and concerns around health, the security of staff and the long-term economy of the future are making business as usual difficult to contemplate for many. The measures introduced by many EU Tax authorities are easing the immediate burden for businesses that trade cross border, by shifting deadlines, delaying dates when payments are due and, in some instances, offering financial support by providing extended deferrals of the VAT that is due. For a full round up of EU tax authority decisions with real time updates, please see our EU Tax Authority Tracker here.
But despite the help on hand, this is not a time for businesses to sleep at the wheel. There are huge changes looming on the VAT horizon. For starters, the EU’s much feted One Stop Shop is still due to be introduced in January 2021. Whilst there are rumbles within the bloc that this date could change, unless and until this is the official position, businesses that will be impacted by the new legislation must prepare in anticipation of the changes coming into force on the 1st of January, 2021. The sharp eyed will recognise that this is also the date in which the transition period between the EU and UK comes to an end, and the Brexit processed is finalised.
Despite strong calls from many sectors for the finalisation of the transition period to be pushed back in light of the coronavirus crisis, as things stand there has been no mention by the government of delays or changes to the timetable. Indeed, there would need to be a change in UK law in order for a delay to take effect.
With this in mind, it is essential that businesses prepare for all eventualities, leaving nothing to chance. There is every possibility that the coronavirus crisis rolls immediately into Brexit and OSS. Changes, delays and holdups to timetables are out of the hands of business owners, but effective preparation and contingency planning are not. This is not a time to panic, but it is a time to ensure that houses are in order for the big changes on the VAT horizon.