Tax implications for the UK as EU divorce begins

Fleur Lewis is a partner at Bishop Fleming accountants Fleur Lewis is a partner at Bishop Fleming accountants

Once the UK leaves the EU it is likely the first practical impact will be felt on sales to and purchases from, the remaining EU. The key practical implications are as follows writes Fleur Lewis, partner at Bishop Fleming accountants:

Selling to the EU

With the UK outside the single market and the customs union, goods dispatched to customers in the remaining EU will need to cross a customs barrier of some kind which may result in delays at the border, impacting businesses selling perishable products and other time-critical supplies.

Without a free trade agreement with the remaining EU, there may be customs duties on imported goods which will affect the competitiveness of UK goods against similar EU produced goods.

For businesses selling to private consumers in the EU, the creation of a customs barrier could have significant practical implications unless special arrangements are put into place. Without such arrangements, customers may have to pay import VAT and customs duties before they can take delivery of goods they have ordered from a UK-based website.

 

Businesses buying from the EU

Purchases by a UK business from an EU supplier may also need to cross a customs barrier, leading to potential delays and the need to pay import duty and VAT. VAT is likely to be reclaimable but could lead to a cashflow cost if it has to be paid at or soon after importation, and reclaimed on the next VAT return.

The level of any customs duty imposed on goods arriving from the EU will depend on the eventual agreement, but a duty on imported goods will make them more expensive than locally produced goods. 

 

Consumers buying from the EU

Goods purchased from an EU website may need to have import VAT and duty paid before they can be delivered - this will increase the cost and make the process more difficult.    

Latest Press Releases

OverBoard launch new colourful limited-edition collection

Leaders in waterproof bags and cases, OverBoard, prove that functionality doesn’t have to be boring ... Read more

Fairline Yachts’ Targa 43 wins at World Yachts Trophies 2018

Luxury British motor yacht manufacturer, Fairline Yachts, was announced as the winner of a highly pr... Read more

FUSION® launches industry first Apple AirPlay and updated FUSION-Link app

Entertainment Leader Launches Industry’s First Wi-Fi Audio Streaming for Apple Devices Empowering Cu... Read more

Marine recruitment company riding on the crest of a wave

Specialist marine and maritime recruitment company, Marine Resources, announces 2018 as its best yea... Read more

View all