VAT Friday: Brexit update (ENG)
VAT Friday – Brexit - 6 months to prepare for UK’s exit from EU
Following the departure of the UK from the EU on 31 January 2020, the UK is currently in a period of transitition, with negotiations between the UK and EU on the future form of the UK’s trading relationship with the EU, including both VAT and Customs Duty.
Early summer 2020, the UK government issued details of the UK Global Tariff (“UKGT”) which should apply to the importation of goods into the UK, replacing the EU’s Common External Tariff, from 1 January 2021.
The publication of this tariff is a strong indicator that the UK government intends to complete the UK’s exit from the EU on 31 December 2020, with or without a trade deal with the EU.
There are less than 6 months until the transitional period ends so the publication of the new UKGT is welcome news as it helps to give certainty to businesses trading to/from the UK as to the likely customs duty rates applicable to goods imported into the UK. However, the UKGT does not reflect any specific trade deals. Further developments are expected as trade talks progress.
It is recommended that companies review the UKGT changes as part of their Brexit preparations. These preparations should focus on the organisation’s physical and legal supply chains to identify potential areas of change, be they financial or administrative.
If you have any questions, please contact your local Crowe VAT specialist or Robert Marchant of Crowe UK at firstname.lastname@example.org.