“Get Brexit Done” was the simple message that led to a Conservative majority in December’s general election. This has meant Boris Johnson’s ‘Brexit bill’ passed easily through the House of Commons. Indeed, the bill has now received Royal Assent so the EU (Withdrawal Agreement) Act 2020 is now in place.
The UK is, therefore, set to leave the EU on 31 January 2020 and enter a 12-month transition period during which a trade deal will be negotiated and businesses will need to get ready for leaving the EU.
As things stand, the transition period will end, with or without a deal, on 31st December 2020.
During the transition period, the UK will remain part of the customs union and the single market, and all EU VAT legislation still applies. However, beyond this, many questions about the rules which will apply following UK’s departure are still unanswered. Undoubtedly, the most complicated tasks lie ahead. The UK is in an unprecedented position – no other Member State has left the EU before.
The transition period leaves the two sides with just a third of the time taken to negotiate the Withdrawal Agreement – but with much more to do.
Every EU member state will have a vote and veto over the deal – which will make negotiations more complicated for the UK. The Government may have to choose between making major concessions to the EU or walking away without a deal as the Prime Minister has so far ruled out any extensions to negotiations.
Businesses, therefore, need to prepare to say “farewell” to Brussels and the trade rules as we know them, and rise to the challenge of getting ready for Brexit.
As the amount of uncertainty shows no sign of abating in the short term, many businesses are understandably concerned about the impact of such doubt.
However, there are a number of practical steps we would strongly recommend businesses consider in the lead up to 31 December 2020. These are outlined in our ‘Planning for Brexit: Indirect Tax’ publication.
In the event that the UK’s negotiation with the EU sees the end of the UK’s participation in the ‘VAT Union’, several simplifications currently enjoyed by UK VAT registered businesses will be lost. Those businesses would need to consider their future options. Essentially, these simplifications are designed to facilitate intra-EU trade. Read more about the areas likely to be affected here.
As the Brexit process continues, we will keep you up-to-date with the latest developments that may affect your business.
In the meantime, if you would like to get advice as well as clarity on your indirect tax position to help your business get ready for Brexit, please contact: