Brexit Changes and the Transition Period
The end of the Brexit transition period is nearly upon us, only a few weeks to go.
It can feel a little unsettling not knowing how the changes may affect your business, how we will be trading with the EU and any potential trade deals to come. All will (hopefully!) be answered soon, but in the meantime, there are a few things you can be sure of.
Our borders for the sale of goods will no longer extend into Europe. Instead we will be adding those 27 familiar countries to the list currently containing the ‘Rest of world’.
The reverse charge will no longer apply and having to account for the VAT on your return goes along with it. Changes to your invoices are almost certain and we won’t miss chasing EU VAT numbers to include on our invoices! There are new rules around how & when you can zero rate your invoices and you will need to pay particular attention here if you are the ‘middle man’ and you trade with the EU from January 2021.
The other things to consider are the preparation of EC sales lists, reclaiming any EU VAT before the deadlines expire and your Intrastat returns. The coding you use when posting these sales may need to change to make sure everything is displayed in the right boxes and the correct declarations are made.
There are a few more important considerations to be made if you move goods in or out of the UK. Will you be making your own customs declarations or use a customs agent? Are you ready to pay any import duty when your goods arrive so they are not stuck at a border? Have you looked into the postponed VAT accounting system, which will help with cash flow at this particularly tricky time? Does a tariff now apply to the goods? I’m sure we’ve all seen the recent adverts from the Government encouraging us to get ready, and now is the time to do so.
There is always some comfort that can be taken from knowing that you are not alone with this. There will be thousands of businesses trying to navigate their way through Brexit and the closer we get, the more information that is available to help us to help you.
Another thing to brighten your day with is that for future prospects, our arrangements with the EU are undeniably changing but there is also plenty of potential. Trade deals are being struck with various different countries, which could open doors and create opportunities for many UK businesses – will yours be one of them?
If you have questions around VAT in relation to the Brexit transition period please contact our Outsourced Accounting Services team via or 01494 552 100
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at time of publishing 25th November 2020.