Today was to be that day but, politicians once again emphasised the fact that politicians are not the best negotiators when clear party lines and manifestos built on limited knowledge and political bias are the determining factors.
At this time, the bookmakers’ favourite is a hard Brexit for the UK.
At this time, many Irish and UK businesses are declining to act.
Given the excessive level of information brokered by government bodies, accountants and advisers on what Brexit can mean to a business it is surprising how little the reaction is.
But, there is a problem, the over reliance on the surface issues are preventing businesses from considering the detail. Yes, under a hard Brexit, a business should apply for an EORI number and supplies to and from the UK will then be accounted for as imports and exports but, is it that simple? But, is it just a hard Brexit which requires such actions to be taken, has not the UK government clearly signalled its intention to leave the Customs union and Single Market. If so, then the trading processes between the UK and the EU will change. Hence the need for businesses to plan how to manage these changes now.
What if your business has a sales condition whereby goods will be delivered under a tight delivery run?
What if your business fulfils a number of small, parcel type, orders?
What if your business fulfils orders under a simplified procedure or concession?
The businesses we are talking to have all highlighted that the mantra of applying for an EORI number and treating all supplies as import/export has not highlighted the deeper issues they need to address, and not just from a VAT perspective. These businesses understand that vat and customs are transactional taxes and, as such, any changes to a transaction provide for a similar adjustment in how VAT and customs can impact on it whether it is from a positive or detrimental perspective. In either case, with specialist input and guidance, these consequences can be managed and, with the appropriate steps, VAT and customs costs can be minimised.
Examples of businesses we are currently working with include supply chain management, component processing, use of fulfilment centres and, small order fulfilment. All have a VAT imprint and consequence which we can guide the client through to determine which option provides the best fit for a number of factors.
Time is running out though businesses that react now may still have sufficient time to understand the changes that may need to be made to secure ongoing supplies.
Planning and managing change requires time, consideration and, structure, the consequences of not planning for change is not worth thinking about.
More detail on the issues to consider can be found in our earlier article – link: http://www.thevatpractice.ie/blog/brexit-the-vat-implications-for-irish-...
Contact Nicholas Ryan at the VAT Practice ([email protected]) to initiate your Brexit VAT impact review.
About [email protected] VAT Practice
Nicholas Ryan the principal of The VAT Practice has over 29 years experience as a VAT specialist building up an extensive knowledge and understanding of Irish, UK and international VAT.
Nick started his career with HM Revenue & Customs as a VAT control officer, it was his interest in how businesses manage their operations and his desire to work more closely with businesses in managing their VAT affairs that lead him to move into the private sector.
Nick has worked for a number of the Big 4 practices both in Ireland and the UK. Since his move to Ireland in 2002 Nick was Director of VAT for PricewaterhouseCoopers in their Cork office and, prior to this, head of VAT services for the Munster Region for Ernst & Young. During his career in the UK Nick also worked for PricewaterhouseCoopers and was a part of the VAT leasing team at KPMG.
During his career he has worked with a wide range of clients including Plc’s, owner managed businesses, sme’s and not for profit organizations. He has advised these clients on a broad spectrum of VAT issues from multi territory transactions, cross border and domestic issues, managing Revenue audits, compliance and risk management issues and the application of VAT to specific transactions or industry sectors.