No-deal Brexit plans reveal worrying outlook for small importers and exporters
HMRC publishes VAT guidance in the event of no-deal Brexit
HMRC has released guidelines to make business owners aware of both immediate and long-term changes if no trade agreement is struck with the EU. __________________________________________________________________________________ An increase in productivity of 5.6% in the UK could lead to an increase in GDP of at least 33.9bn per year, valuable resource that can be unlocked by smarter working practise and policies for Small and Medium Sized Businesses. In a no-deal Brexit scenario, the UK will no longer enjoy the free trade with EU countries that it does now, with businesses facing VAT and import duties as well as increased administrative requirements. As a result, importing, exporting and trading with countries inside the EU will become similar to trading with countries outside the EU, such as the US. In other words, those companies that already import or export to non-EU countries will be able to largely transfer their existing processes to cover all countries outside the UK. Critically, those businesses that have only ever imported or exported between EU countries and will face wholly new administrative burdens that will require significant preparation before March 2019, because to import or export goods across the UK/EU border, businesses will need to register for an Economic Operator Registration and Identification (EORI) number. Not only this, for businesses that want to continue to move goods across the UK/EU border and do not want to manage the increased administrative burden themselves, the UK government has suggested engaging an agent such as a customs broker, freight forwarder or logistics provider, adding to the cost of understanding this extra bureaucracy.
A successful Brexit process for any business will be one in which solid cash flow and productivity are as little impacted as possible.While it’s true that there is little specific preparation that can be undertaken until negotiations are complete and the Withdrawal Agreement is published later this year. It is essential that every business understands the basics early and has access to sound advice on its import and export position, regardless of the eventual outcome with Brexit. Adam Prince is vice president of product management at Sage Read more about the impact of Brexit on small UK businesses: