The UK has voted to leave the EU, so how will this impact on the tax regime?
The first thing to note is that there will be no immediate change. We are still a member of the EU. Until Article 50 is invoked, we will continue to engage with EU business as normal.
Once this is invoked, we will remain bound by EU law until the terms of our exit have been determined, this process is expected to take at least two years.
There will undoubtedly be a number of tax implications depending on the way that Brexit and ongoing trading is negotiated.
The most immediate issue will be Customs Duties and VAT. Once we Brexit we are no longer part of the EU Customs Union, meaning that EU customs duties would apply to goods brought into the UK from the EU, and also UK exports to the EU.
In addition we will no longer be obliged to have a VAT system as this is currently governed by EU directives. It seems very unlikely that the government will do away with VAT as it is a valuable source of revenue, but to continue it will require a UK legal basis giving the scope for changes. UK businesses are unlikely to continue to benefit from the current EU simplification methods.
It is easy to speculate on the likely changes but ultimately only time will tell. In amidst all of the uncertainty one thing is clear…this will not be a quick process.
For more information, please contact Lesley Sutton on 01484 550037 or email firstname.lastname@example.org.