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Eight weeks to Brexit: Are firms prepared?

As HMRC sends a letter alerting businesses to the post-transition rules, frustrated AccountingWEB members have vented that they’re “not prepared at all”.

5th Nov 2020
Community Assistant AccountingWEB
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“Time is running out and new customs and tax rules will not change or go away if a Free Trade Agreement is negotiated,” warned HMRC in a letter sent to 200,000 VAT registered businesses.  

“It’s essential that you immediately appoint a specialist to handle your import and export declarations or take the necessary steps to be ready to do them yourself.”

Ahead of the deadline, businesses are being urged to have a UK Economic Operator Registration and Identification (EORI) number, decide how they will make customs declarations and check if their important goods are eligible for staged import controls.

However, a new government ‘make sure you’re ready’ assessment has exposed the lack of information available for businesses and their accountants. With less than two months to go until the new trading rules apply, the assessment claims to give a “personalised list of actions”.  

It takes you through questions relating to where you live, what you do, and the reasons for your potential travel to the EU. The survey was flagged by an AccountingWEB reader after they found the results to be little support for their professional services clients.

“Waste of resources”

Many AccountingWEB readers on Any Answers branded the assessment a “waste of resources”.

The constantly-changing information has not helped the confusion in the community. “How can we be prepared when we don’t actually know what will happen?” asked AccountingAWEB reader Kaylee100. “It would be crazy currently, when so busy with Covid advice, to spend time on something that may or may not happen in a particular way.”

Reader Paul Crowley agreed, deeming the assessment to be a “useless” waste of time. They reported feeling “exhausted from Covid related issues” after receiving no support whatsoever.

“It’s impossible to be prepared for an unknown situation,” said Ireallyshouldknowthisbut. “It is as likely that Boris will bottle it and put it back 12 months as it will go ahead in the current shambolic state.”

Some readers disagreed, arguing that the power now rests in the hands of the UK and the collective individual EU members to agree.

SteveHa assured the forum there was an “oven ready” deal set to go three years ago, to which DKJL replied: “They forgot to switch on the oven.”

Adequate support

However, while some members felt “not prepared at all” for Brexit, there were some words of praise for the tax department’s efforts: “HMRC has published extensive and detailed guidance on trade, post Brexit and for VAT at least, is unlikely to change much,” said Jason Croke.

“Post Brexit, there is only the UK, the EU is treated the same as the rest of the world, so shipping goods from the UK to a consumer in Germany will be a zero rated sale,” he explained. “You need to make customers aware that there may be additional taxes to pay locally if they want to get their product.”

For further technical background on how VAT will work after Brexit, make sure to read and bookmark AccountingWEB’s continuing Brace for Brexit coverage.

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