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Taxation/Insurance

Have you considered the following?

Double Taxation

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Resources and information

HMRC guidance for the future treatment of payments between associated companies in the UK and other member states that are currently exempt from deduction of tax under the Interest and Royalties Directive and the Parent Subsidiary Directive: https://www.gov.uk/guidance/changes-to-deduction-of-tax-on-interest-royalties-and-dividends-if-the-uk-leaves-the-eu-without-a-deal

Import VAT

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Context

With the UK’s exit from the EU, in the event of no deal, the UK will introduce postponed accounting – the same system that is currently in place for intra-EU trade. This means that there will be no need to pay VAT at the border; the only change caused by Brexit on VAT will be on parcels valued up to and including £135.

Resources and information

UK Government technical notice on VAT for businesses if there's no Brexit withdrawal agreement: https://www.gov.uk/guidance/accounting-for-import-...

HMRC have provided guidance on managing your import VAT on parcels.

HMRC have produced a communications pack covering Import VAT on parcels in the event of a no deal EU exit: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/790238/Parcels_Communications_Toolkit.pdf

Insurance

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Your business should consider:

If you are a business that is stockpiling? Have you checked with your insurer or insurance adviser on whether you are still fully insured?

There will usually be a limit on cover for stock on the premises under commercial contents policies. While there may be cover for temporary fluctuations, firms should check that any additional stock can be covered by increasing the sums insured. If transporting extra stock, you should also check your commercial motor or goods-in-transit policy.

If you are temporarily storing additional stock or raw materials off site in a warehouse, check the cover under your commercial policy, and the extent of any cover provided by the warehouse firm.

Check the policy terms and conditions to see if there are any restrictions on the amount of stock or raw materials that you can hold, and the way in which they are stored as, for example, there could be an increased risk of fire. If unsure then talk to your insurer or insurance adviser.

Source: The Association of British Insurers (ABI)

VAT registration in the EU

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Context

If you trade in goods and decide to hold stock in an EU country for supply to your EU customers, you will need to register for VAT in that country. Dependant on the country where your stock is, you may also be required to appoint a Fiscal Representative who is jointly liable for any VAT you may owe.

Your business should consider

Do you know which country would be best suited to support your supply chain to EU customers/suppliers?

Do you have access to bank guarantees required by Fiscal Representatives?

Does your business model allow enough margin to absorb the increased costs these new processes will bring?

Resources and information

HMRC has published an information pack to help businesses plan ahead plan for the contingency of a ‘no deal’ EU Exit.

The pack includes guidance on how VAT could be affected and actions to take now. Information is split by topic and audience, and flowcharts: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit

Future editions of this pack will include information from other government departments responsible for policies that will impact trade at the border.

UK Government technical notice on VAT for businesses if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal

If your business currently uses the UK VAT MOSS Union scheme, in the event of a no-deal Brexit you can continue to use the MOSS system after the UK leaves the EU, but must register for the VAT MOSS non-Union scheme in an EU member state: https://www.gov.uk/guidance/vat-it-system-rules-and-processes-if-the-uk-leaves-the-eu-without-a-deal