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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

Scottish businesses told to prepare for VAT implications of no deal Brexit

22 February 2019

Scottish businesses are being warned to prepare for the VAT implications of a no deal Brexit according to leading accountants and financial advisers French Duncan. Letters from HMRC are currently being issued telling firms about the changes which will affect all businesses which are VAT registered and which currently import and/or export goods within the EU. However, these changes do not immediately affect firms which import or export to Northern Ireland and Ireland where the government has stated it “will do everything in our power to avoid a hard border whatever the circumstances.”

Maria McConnell, VAT Director with French Duncan, explained: “Businesses will be responsible for making customs declarations for their UK-EU trade in a no deal scenario. HMRC has stated that the simplest way to do this is to appoint a customs agent to manage the process for them. Businesses need to register immediately for an Economic Operator Registration and Identification (EORI) number. For those businesses who do not wish to appoint an agent they must ensure they have someone trained in the business to make customs declarations; buy specialist software to link to HMRC’s customs software and, if exporting register for the National Export System. This could result in a lot of additional work, or costs, for many businesses.”

Maria Mcconnell With Jacket Aug 2016 Resized 250Px

“In addition, HMRC is introducing new Transitional Simplified Procedures (TSP) for customs to make importing easier for the initial period after the UK leaves the EU, should there be no deal. These procedures, which will be implemented at ‘roll on roll off’ ports such as the Channel Tunnel, mean that, once registered, businesses will be able to transport goods into the UK without having to make a full customs declaration at the border and will be able to postpone paying import duties. There will, however, be additional information required for controlled goods, where business owners will still be required to provide some information before import.”

Maria concluded: “The way businesses will be required to account for VAT on imports is also changing. Business owners will be able to account for import VAT on their VAT return rather than when the goods arrive at the UK border. HMRC has stated that businesses will be able to declare and recover import VAT on the same VAT return, though full details of how this will work in practice are yet to be provided. Business owners who import and export must act immediately to ensure they are ready for a potential no deal Brexit. There are serious VAT and customs implications in the event of a no deal and it is essential that Scottish business owners are aware of the forthcoming changes and are prepared for them.”