Close
  • Home
  • News
  • BCC: business alarm on potential Brexit VAT bombshell

BCC: business alarm on potential Brexit VAT bombshell

Commenting on the passage of amendments to the Customs Bill, which commit the government to fully separating the UK from the EU VAT regime, Adam Marshall, Director General of the British Chambers of Commerce, said:

“This is the first view businesses have on what the VAT regime could be like after Brexit – and it doesn’t look pretty.

“A separate UK VAT system will create significant on-going costs for businesses trading across borders, unless special work-arounds are put in place. This change will pile pressure on Her Majesty’s Revenue and Customs, which is already contending with other facets of Brexit, plus the delivery of a new customs system and Making Tax Digital.

“Firms need to know – now, not in a year’s time – whether and how the government intends to address the potential VAT bombshell facing businesses trading with the EU27 in future. Without a more generous deferment account scheme or postponed accounting, many companies face severe cash flow issues, big new administrative headaches, and a serious loss of competitiveness.”

Under the current system, firms trading with the EU report every quarter on what they have imported and exported, with a VAT bill calculated after. Without clear facilitations, the risk facing business is the need to pay VAT at the point of each cross-border transaction, creating a significant cash flow and competitiveness problem for many.

In the BCC’s Risk Register, questions around Import VAT and Services VAT remain at a red rating.

Adam Marshall added:

“Businesses are hugely frustrated that politics and ideology – rather than real-world economic considerations – seem to be driving every twist and turn in the Brexit saga. For businesses, VAT isn’t some obscure technicality. A clear, easy-to-use VAT system is crucial for businesses to trade successfully with partners in Europe – and around the world.”

Ends

Notes to editors:

The British Chambers of Commerce (BCC) sits at the heart of a powerful network of 53 Accredited Chambers of Commerce across the UK, representing thousands of businesses of all sizes and within all sectors. Our Global Business Network connects exporters with nearly 40 markets around the world. For more information, visit: www.britishchambers.org.uk

The BCC has launched a campaign aimed at eradicating not-spots for mobile voice coverage. Add your not-spot here.

Media contacts:

Allan Williams – Head of Press and Communications

020 7654 5812 / 07920583381

Orla Hennessy – Senior Press and Communications Officer

020 7654 5813 / 07825746812

Press Release

Join a chamber

Related News

BCC Quarterly Economic Survey: businesses start New Year in solid health, but inflationary pressures a concern

The British Chambers of Commerce (BCC) today publishes its Quarterly Economic Survey – the UK’s largest and most authoritative private sector business survey.

BCC: Levy on EU workers would be harmful

Adam Marshall, Director General, comments on remarks by Home Office minister Robert Goodwill on proposals for an immigration skills levy on EU workers.