Rob Janering of Accordance VAT has prepared a checklist to get ready for Brexit – whatever happens next
It’s been a tumultuous two weeks in the UK Parliament and Europe, trying to determine a Brexit outcome. As with the 2016 vote itself, there were some close votes and there have also been more changes in approach and ways forward proposed from the Government, parties within parties and the EU than occur in a good novel.
However, with last week’s EU Summit declarations finished, and the dust settled (for the moment), it’s time to take stock again. There is still plenty of uncertainty in the air and the risk of a hard Brexit/no deal exit remains high. Therefore, businesses should continue to make Brexit planning a priority even if this means “gaming” a number of scenarios and being prepared for a number of eventualities.
How is VAT impacted by Brexit?
For VAT purposes, any type of Brexit is likely to have significant impacts because of the way it interacts with nearly all transactions made by businesses trading across the EU. Many different situations may unfold under differing timescales and hence mapping these now in order to be prepared and ahead of the pack might just be the difference between continuing to trade smoothly or facing blocked supply chains and increased costs when or if the UK finally Brexits.
What is the current position?
Three key votes took place in Parliament two weeks ago. A motion to not leave under a no-deal situation was passed but at the same time, the prime Minister’s Withdrawal Agreement (WA) was voted down for a second time.
To prevent this happening, Parliament instructed the Government to ask the EU on Thursday 21 March for an extension to the UK’s Brexit date. The UK asked for an extension to 30 June, but this was rebuffed by the EU. Instead it was agreed that an extension to 22 May can happen if the WA agreement is passed. If that doesn’t happen then the UK will leave the EU on 12 April.
If the WA isn’t agreed to then it will involve the UK leaving without a deal unless something changes in the meantime. This could only be the UK revoking Article 50 or asking for a significantly longer extension because it is going to have a general election, second referendum or some other significant development will occur (i.e. negotiate for a different outcome, such as Labour’s proposed Common Market 2.0).
What planning to undertake?
Our view is that the chance of a no deal Brexit still remains significantly high. This is because the UK Parliament will need to agree on a position very soon, before…