Brexit Impact Review

Hard Brexit, Withdrawal Agreement or No Brexit?

Whatever the outcome, your European trade is our primary concern. Amidst the uncertainty, many businesses have been nervous about forging Brexit plans. Acting now will protect your valuable supply chains and allow you to trade confidently across Europe.

Whether you’re manufacturing car parts, hosting conferences or supplying clarinets, here are your top 10 considerations:

  • UK businesses that are registered for VAT in the EU will need to appoint a Fiscal Representative in those countries that impose this requirement for a non-EU business.
  • Several tax authorities, including Belgium and Spain, have already advised that a Fiscal Representative will need to be appointed before the UK leaves the EU.

  • EORI numbers for imports into the UK – HMRC have advised that UK businesses that do not have a GB EORI number will need to apply for one in the event of a hard Brexit if they wish to import goods from the EU.
  • EORI numbers for exports from the UK – UK businesses that are going to export goods to the EU after a hard Brexit will need to apply for a GB EORI number if they do not already have one.
  • Use of non-GB EORI numbers in the UK – EU businesses that have an EORI number issued by another Member State are advised by HMRC that this will be acceptable for exports and imports into the UK for a period of time following a hard Brexit.
  • Requirement for EORI numbers in the EU – if a UK business is registered for VAT in another Member State and currently has its UK EORI linked to that VAT number, this will no longer be valid post a hard Brexit. Instead, the UK business will have to obtain an EU EORI. 

 

B2B and B2C businesses will need to consider:

  • Postponed accounting for import VAT
  • Parcels below £135
  • Low value consignment relief (LVCR)
  • Customs declarations
  • Entry Summary Declarations

  • B2B supplies of goods can be zero rated in the UK but it will be necessary to consider if there are any implications for the exporter when the goods are imported into the EU. Incoterms should be urgently reviewed.
  • B2C supplies of goods – they can also be zero rated in the UK but there are more complex implications when the goods arrive in the EU:
    • Customer acts as importer
    • Business acts as importer
    • Business holds stock within the EU.

  • Customs declarations – specific advice will need to be taken from your logistics provider on what is required and the additional costs that will be incurred.
  • Payment of import VAT – some Member States apply simplifications for import VAT either by deferral or postponement.
  • EORI

  • VAT registration & fiscal representation – if a UK business imports goods into the EU, it will need to consider if a local VAT registration is required for the onward supply of the goods.

  • Use of triangulation simplification – currently UK businesses can use their UK VAT number in order to apply the triangulation simplification to remove VAT registration obligations within the EU. This will no longer be possible post a hard Brexit but if the supplier has another EU VAT number, this can potentially be used
  • Other transactions – the EU is not changing their place of supply rules so any current VAT registrations as a result of supplying goods in the EU should not be affected by a hard Brexit. However, the requirement to appoint a Fiscal Representative will need to be considered.

The UK Government is not proposing to make any substantive changes to the VAT rules that apply to services and the place of supply rules in the EU will continue to apply as currently. Businesses should still review:

  • Supply of B2B services
  • Supply of B2C services
  • Use and enjoyment provisions

  • UK businesses supplying electronically supplied services on a B2C basis within the EU – UK companies will no longer be able to use the Union MOSS as the UK is not a Member State. Registration in another Member State to use the non-Union MOSS will be required.
  • EU businesses supplying electronically supplied services on a B2C basis to UK customers – will no longer be able to use MOSS to account for the VAT due and will need to register for VAT in the UK.

The Refund Directive allows EU businesses to claim VAT incurred in other Member States without a VAT registration in place.

  • UK businesses incurring EU VAT – will have to make any claims for VAT incurred in 2018 before the UK leaves the EU.
  • EU business incurring UK VAT – will also have to make any claims for 2018 before the UK leaves the EU as the Refund Directive portal will no longer be available.

  • Supply of goods between the UK and the EU – there will no longer be a requirement to submit EC Sales Lists or Intrastat Declarations for these transactions.
  • Supply of services between the UK and the EU – there will no longer be a requirement to submit EC Sales Lists for Services for these transactions.
  • Invoices issued by UK business for supplies in the EU – currently UK businesses can issue invoices applying UK invoicing rules for supplies where the VAT is due in another Member State. This is only available for EU established businesses, so changes may be required to invoices post a hard Brexit.

Other Considerations

Industry specific guidance, such as around Tour Operators Margin Scheme may also be required.

How can Accordance help?

Our experts are always on hand to offer clarity and will uniquely tailor our Brexit Impact Review to suit your needs. Get in touch now to find out more….

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