The Government yesterday offered clarification to UK businesses that supply and receive goods to or from other jurisdictions, applicable to the (increasingly likely?) position where the UK leaves the EU in a "no deal" scenario.
Whilst there was a small amount of positive news – applicable mainly to those businesses that bring goods into the UK from overseas - the announcements did little to alleviate the prevailing concern that Brexit will likely bring with it an administrative and financial burden which simply does not exist for those currently transacting with the EU and beyond.
Briefly, the announcements confirmed the following:
With little over six months until these changes are stated to take effect, it is likely that these announcements will be further cause for concern to businesses affected by Brexit.
Alongside the cash flow impact of more transactions being within the scope of import VAT, the Customs Duty aspect to Brexit will arguably be equally, if not more, challenging for some businesses than the VAT position. This is because whilst VAT may be a familiar (yet unwelcome!) concept to some organisations, Duty may be wholly or overwhelmingly unknown if there has never been cause to consider it in the past – which would likely be the case for example if all business is UK or EU-centric.
Customs Duty is a complex regime, and we anticipate that businesses unfamiliar with its operation may need support in arriving at – amongst other things - the correct classification and valuation of imported goods, the various administrative requirements which must be fulfilled, and to identify which of the many Duty reliefs they may be able to benefit from.
How can we help?
We understand that the lead-up to Brexit may be a daunting time for affected businesses and for this reason have worked with many client clients to understand the increased financial and administrative cost, and also to implement any feasible mitigation steps which exist. What we have found to work well is an initial Brexit "impact assessment" or "readiness review" in order to identify and quantify the ‘cost’ of Brexit on various levels, which is then built upon and developed to provide bespoke solutions.
If you wish to discuss how Armstrong Watson can assist, please do not hesitate to get in touch.
For help and advice on how Brexit might affect your business and the best ways to prepare, please get in touch with Alex NicholsonContact Alex to find out more
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