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Is Your Business Ready For A No Deal Brexit?  

As you know, on 13 March, MPs voted to rule out a no deal Brexit. And until something else is decided, no deal Brexit is still the default position. And so, no deal Brexit has now become even more of a possibility, since Parliament has yet again rejected Theresa May’s Brexit deal last week. Subsequently, the UK has until April 12 to come up with an alternative to leaving without any deal. As the Commons’ failure to approve a deal, now means that Article 50 can only be extended until that date. So, what does this mean for your business, should the UK leave the EU without a deal?

No Deal Post-Brexit VAT Preparations

If you’re a UK VAT-registered business trading with the EU, you’re being urged by HMRC to be prepared for the possibility of a no deal Brexit. In this respect, HMRC sent letters to 145,000 companies, of which you may well be one,  advising to take 3 actions ahead of the leave date: 

  1. You need to register for a UK Economic Operator Registration and Identification (EORI) number.
  2. You need to decide if a customs agent will be used to make your import and/or export declarations, or if declarations will be made by your business, via software which is compatible with HMRCs systems.
  3. You need to contact the organisations responsible for moving your goods (such as haulage firms), to determine if your business will need to supply additional information to complete safety and security declarations, or if you will need to submit these declarations yourself.

In fact, a report jointly published by HMRC and the National Audit Office (NAO) recently revealed that approximately 55 million customs declarations are currently made by British businesses every year. This figure may rise to 255 million when the UK leaves the EU.

 

Simplified Import Procedures In The Event of No Deal Brexit

In addition, HMRC has implemented a simplified import and export system. So, in the event of a no deal scenario, a mechanism to ensure that your goods move to and from the UK, with a reduced administrative burden for your business is in place, in terms of the documentation required at the port of entry and exit. Hence making it easier for your business, if you import from the EU using roll on roll off (RO-RO) facilities. This development will be of interest to you, if your business is involved in intra-EU trade. And in particular, if your business goods arrive and depart from one of the UK’s RO-RO locations, for example, Dover or the Channel Tunnel. You need to consider if you wish to make use of this provision. Likewise, HMRC has advised that you will need to register your business to use Transitional Simplified Procedures (TSP), effective since 7 February 2019 via the following link: https://www.gov.uk/guidance/register-for-simplified-import-procedures-if-the-uk-leaves-the-eu-without-a-deal. Altogether, these simplified transitional procedures will reduce the amount of information you need to give in an import declaration, when your goods are crossing the border. They do this by allowing you to defer giving a full declaration and paying the relevant customs duty.

 

Guidance Tool

The government has also devised a guidance tool to help prepare your business for the UK leaving the EU. You can use this tool to find out:

  1. What your business may need to do to prepare for the UK leaving the EU
  2. What’s changing in your industry
  3. Information on specific rules and regulations

You’ll need to answer 7 simple questions to get the relevant guidance for your business.

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

Watch the video here.

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