HMRC Warns Businesses of Potential Fallout from No Deal Brexit
HMRC has written to tens of thousands of businesses around the country to advise them of the potential ramifications of the UK exiting the European Union without any transitional agreement being put in place.
The No Deal Brexit scenario is described in the notice as being “unlikely” but remains a possible outcome with the UK scheduled to leave the EU on March 29th 2019.
Signed by HMRC’s deputy chief executive Jim Harra, the notices have been sent out to all VAT-registered businesses which import or export goods within the EU but which do not trade with countries outside the EU.
The advice given to recipients of the recent communication is that “there would be immediate changes to the way UK businesses trade with the EU” in the event of a No Deal Brexit.
Listed as being among those changes are UK businesses needing to apply customs, excise and VAT procedures to goods traded within the EU, which are currently only required in relation to goods traded beyond the EU.
Correspondingly, trading partners in the EU would also be required to carry out the same processes in relation to goods they receive from UK-based companies, which they are not currently required to do.
“While no changes will be made before 29 March 2019, you may wish to use the coming months to understand more about what leaving the EU without a deal would mean for you,” the notice goes on to say.
“The steps and obligations you may need to take to continue to trade with the EU if the UK leaves without a deal are broadly the same as those that apply to businesses that trade with countries outside of the EU.”
A series of technical notices have been published on the government’s website to provide some insight into how Brexit might impact businesses from April 2019 onwards.
Issues covered by those notices include how customs, tariffs and VAT considerations might be affected if the UK leaves the EU without a formal Brexit deal.
Before signing off, Mr Harra makes clear that HMRC will be getting back in touch with VAT registered businesses before the spring of next year to provide further guidance.
“In the event of No Deal, the government is committed to prioritising stability for businesses,” he wrote in his recent notice.
“We will continue to work closely with industry to ensure that interventions in a no deal scenario are conducted in a way which minimises delays and additional burdens for legitimate trade, while robustly ensuring compliance.”
