Speculations continue to be part of the controversy around the UK and its imminent exit from the European Union.
At this time, it’s impossible to know exactly decisions that will be taken by the end of the month. While waiting for a decision a lot of information is being broadcast and companies must now take the necessary measures.
EMERGENCE OF NEW CUSTOMS FORMALITIES
According to HMRC, if the exit of European Union is confirmed on 29 March 2019, this means that every movement of goods will have to fulfill new formalities regarding customs, VAT and tariffs. As of now, companies must register to obtain an identification number (EORI). At the moment, only 20% of British companies requiring this registration have prepared for it. A warning was provided for those which are not recorded.
NEIGHBORING COUNTRIES WARN THE UNITED KINGDOM
Spanish and Belgian tax authorities have informed UK companies holding a VAT registration in their country about their need to appoint a tax representative. The United-Kingdom will be considered as a third country and all statements and fiscal formalities will need to be assigned to a legal representative.
Representatives have a key role, holding responsibilities of all the foreign customer’s accounting. Their fees are often high and they require a bank guarantee. However, Belgian authorities invoke leniency and leave at least 6 months to allow UK firms to be in compliance.
« NO DEAL », STEP TOWARDS THE ABOLITION OF SOME DUTIES
If the UK leaves the European Union on March 29, 2019, without prior agreement, they could claim the loss of 80% to 90% of custom duties on imported products as for example automotive spare parts. Clear tariffs on the majority of products will also contribute towards maintaining the falling import prices and also minimise the consequences if no deal is reached. No official announcement has been made yet.