The Government must address the concerns of small businesses with the potential for a no-deal Brexit set to clash with the introduction of HMRC’s new online VAT system in April 2019, Making Tax Digital (MTD), according to the ACCA.
In addition, currently companies in the EU are able to obtain VAT refunds from other member states through a straightforward single-market mechanism. This could cease in the case of a no-deal Brexit (29th March) and some member states, who would then be classified as third countries, may keep from refunding VAT to the UK as they currently do with US businesses and other third countries. In addition, a no-deal Brexit that identified the UK as a third country to the EU would require UK businesses’ IT systems to be changed in order to re-categorise them, creating additional complexity to VAT system.
This further complication to VAT submission would clash dramatically with the government’s new online tax system, due to come into effect just three days later on April 1st, creating new rules and classifications to be adhered to within just 72hrs. To prevent this clash creating disorganisation for small business owners, ACCA are calling for the government to be more precise than their current guidance released back in August and produce specific scenario plans for the various potential outcomes of a no-deal Brexit on VAT.
Full press release
© ACCA - Association of Chartered Certified Accountants
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