The Government has urged business leaders to step up preparations for what amounts to a no-deal departure from the Single Market on 1 January.
HMRC has written to 200,000 businesses that trade with the EU to set out the new customs and tax rules coming into place and how to deal with them. The Prime Minister also held a call with business leaders to rouse them to prepare for Australia-style arrangements from 1 January.
The actions are part of a new campaign entitled, ‘Time Is Running Out’, and comes as negotiations with the EU appeared to have hit the buffers.
Brexit: Guide to changes in VAT
Read this AAT Knowledge Hub briefing on how the treatment of goods and services to and from EU will change from January 2021
The business community has responded with frustration:
The British Chambers of Commerce said:
“More businesses will undoubtedly step up preparations for change over the coming weeks, but many are still facing unanswered Brexit questions that have a big impact on their day to day operations.
“Facing the triple threat of a resurgent Coronavirus, tightening restrictions and a disorderly end to the transition period, it is little wonder businesses are struggling to prepare. Many firms will be tired of posturing, cliff edges and deadlines, while others are still grappling with fundamental challenges as a result of the pandemic.
Meanwhile, experts suggest the Government is varnishing the facts to say the UK will have an Australian-style relationship with the EU if we leave without a deal.
Dr Anna Jerzewska Customs and Free Trade Expert says: “We will not be on ‘Australia’s terms’ if we leave without a deal.” She notes that the UK would need to get 89 agreements with the EU to match what Australia enjoys.
Nevertheless, Prime Minister and Chancellor of the Duchy of Lancaster (CDL) Michael Gove are asking businesses to step up their efforts to get ready for the “changes and opportunities” in just over eight weeks.
One of the major areas of change will be in VAT – which could be equal in impact to customs.
In order to help members prepare, AAT has put together an overview of VAT challenges, and technical briefing to help members prepare. They can be accessed here:
- Brexit: why VAT is going to get messy after the transition period ends
- Guide to how Brexit will change VAT processes
David Nunn is Content Manager at AAT.