Brexit: The latest developments and their VAT implications.

Brexit summary April 2019

What has happened up to now?

Over the last few weeks, British Prime Minister Theresa May has put her Brexit deal to Parliament three times, in what were called “meaningful votes”, to secure her deal. Her plan was voted down by historic margins.

The EU had agreed if the withdrawal agreement was agreed by MPs by the original Brexit date, 29 March 2019, the UK could then have until 22 May 2019 to complete the paperwork and legislation to leave the EU. If the Brexit withdrawal agreement was not agreed by MPs, the UK would only have until 12 April 2019 to come up with an alternative or face leaving the EU without a deal.

What is likely to happen?

It was announced on 2 April 2019 Theresa May and Jeremy Corbyn will meet to discuss a way to break the Brexit impasse. They will try to agree on a plan on the future relationship with the EU. The prime minister has plans to ask the European Union for a further extension to Brexit.

If the UK leaves the European Union without a deal on 12 April 2019, for the first time import VAT will be due on goods moving from Ireland to Northern Ireland and from imports into the UK from the remaining EU countries.

If the UK leave the EU without a deal, elaborate and extensive checks will occur at the Irish border. It is still unclear where such checks will take place. This could introduce a “hard border”. Taoiseach Leo Varadkar is due to have talks with the French president and is also due to meet the German chancellor. It is expected the Taoiseach will discuss the possible extension of Article 50 and also how to protect the EU single market and keep the Border open in a no-deal Brexit situation.

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No deal Brexit – Import VAT

HMRC are developing a new online service to make payment of Import VAT as simple as possible for businesses without a UK VAT number. If you are not registered for VAT, the online service will enable you to account for Import VAT on goods in a quarterly import VAT return.

Businesses will be able to submit a return and pay any import VAT due from 1 July 2019.  Records of any goods moved into the UK from 11pm on 12 April 2019 should be kept.

The types of records kept should include:

  • The receipts for goods;
  • Records of transport costs; and
  • Records of any excise goods (alcohol, tobacco or certain types of fuel).

Businesses can register now with HMRC to file these quarterly returns. 

For business that are registered for VAT, they will need to account for import VAT on the periodic VAT returns.

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If you have any queries or you are worried that your business is not prepared, please contact our team for free bespoke advice.  

We know that Indirect taxes such as VAT and GST can have a huge effect on your business. As VAT rates change sporadically keeping yourself informed can be difficult.  Compliance is always crucial. That’s why our Indirect Tax Experts share their hand-picked news stories every day that you need to know. From breaking news to VAT changes and new EU legislation. We know that relevant information means better decision making. We aim to be your number 1 source for VAT and GST news.


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