SCOTTISH businesses have been warned that they should be prepared for the VAT implications of a no-deal Brexit.
Accountants and financial advisers French Duncan said letters from HMRC are being sent out to companies informing them about the changes which will affect those that are VAT-registered and are involved in the import or export of goods within the European Union.
However, the company said the changes will not immediately impact firms which import or export to Northern Ireland and Ireland, where the UK Government has declared it “will do everything in our power to avoid a hard border whatever the circumstances”.
French Duncan’s VAT director, Maria McConnell, said businesses will be responsible for making customs declarations for their UK-EU trade in a no-deal scenario.
She said HMRC had indicated the simplest way for firms to comply would be to appoint a customs agent to manage the process.
“Businesses need to register immediately for an Economic Operator Registration and Identification (EORI) number,” she said.
“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.”
McConnell said this could result in a lot of extra work – or costs – for many businesses.
“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,” she said.
“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.”
McConnell added that the way businesses will have to account for VAT on imports is also set to change.
She said: “Business owners will be able to account for import VAT on their VAT return rather than when the goods arrive at the UK border.
“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.”
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