A particular concern from an indirect tax perspective is that, depending on the terms of future trade agreements and the implementation of a transitional period, the UK may see the rate of duty rise. This would subsequently impact the total costs to the business. Additionally, EU-imposed statistical reporting and supplementary filings such as Intrastats and EC Sales List (for B2B supplies of goods and taxable services) will no longer be required. Brexit will likely impact the number of UK businesses needing to register and comply with foreign VAT rules and consequently, be affected by the speed of VAT recovery and cash flow.
Thomson Reuters continues to monitor the UK government as they proceed with determining their legislation regarding VAT in a post-Brexit separation from the EU. After initial evaluation of standard use cases for the UK, including both domestic and cross-border trading of goods and supply of services, we plan to update our International Tax Data content to assign logic that will return the assumed VAT result. Since the UK has not published new laws for a post-Brexit VAT regime as yet, we are testing general regulations and HMRC guidance to determine what the tax treatment should be for sale/acquisition of goods and supply/acquisition of services for both domestic and cross-border transactions.
Using ONESOURCE to manage these changes means you can rest easy knowing we are doing the research and updates for you. A cloud solution means we can make these changes in near real-time, without impact to your team or IT department. These changes are all date-driven, which allows you to continue to calculate VAT under the current regime through to Brexit date and, upon Brexit day and beyond, calculate VAT according to the post-Brexit laws.
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Britain’s decision to leave the EU has significant implications on trade. The free trade that exists between the UK and its European neighbours (without the imposition of VAT or customs duties) will be likely lost. Regardless of the terms of the agreements Britain secures with the rest of Europe, future trade legislation will affect all stakeholders involved in trade activity and the supply chain process to and from the UK.
Brexit increases the urgency for organisations to review their supply chain and ascertain which product categories/production facilities will be affected by changes in trade legislation post-Brexit. Keeping up to date with these shifts in legislation will be cumbersome for already over-burdened departments. Automating these trade process can improve reporting accuracy, appropriate duty payments apportionment, compliance to regulations, and consistent trade flows. ONESOURCE keeps your process running smoothly — which means less risk of non-compliance or overpaying duties.
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Thomson Reuters can help relieve the growing pressures of managing Brexit implications to tax and financial reporting by offering a modular tax technology platform which grows to meet your needs. ONESOURCE uniquely provides embedded knowledge of global requirements alongside a connected portfolio of innovative technology solutions which help to drive comprehensive tax and financial reporting processes across your organisation – and guide you through this period of uncertainty.