VAT

Will business owners face cashflow problems after Brexit VAT law changes?

By RJP LLP

Will business owners face cashflow problems after Brexit VAT law changes?

There are potentially some significant new VAT implications for business owners on the horizon as a result of Brexit and the situation is currently under debate. Although in the last Budget, Philip Hammond said he was intending to keep tax laws as close as possible to the current position to avoid any detrimental impact on business owners after the UK leaves the EU, there is an issue with VAT looming ahead.

Unless HMRC acts with interim measures, it could mean cash flow problems for thousands of firms who will be forced to pay VAT upfront in cash on imports when the UK leaves the EU.

It could mean that EC imports would potentially incur VAT as soon as they hit UK shores unless the business owner has a deferment account with HMRC, which would entitle them to defer the charges until the 15th day of the following month.

Currently, MPs are calling for a deal to be brokered between the UK and member states. Nicky Morgan the Treasury committee chair has written to HMRC asking for clarification to try and reassure business owners of their cash flow obligations.

The British Retail Consortium is also concerned about the situation and emphasised the importance for business owners affected to know what their future tax liability will be and whether measures are needed to avoid any negative cash flow implications and also to avoid price increases to consumers. Their chief executive Helen Dickinson, said: “It’s ridiculous to assume that it would be easy to bring forward the timings on such significant amounts of cash.” She added, “Resolving this uncertainty can be achieved by securing a deal between the UK and EU on VAT and through policy measures adopted by HMRC like self-assessment.”

One UK based furniture retailer, who is importing products from Italy said, “Having to pay the VAT upfront could have a massive effect on our business as it would cause cash flow problems due to the frequency of our collections and having to wait a full quarter before we can reclaim the VAT. It could even put us out of business.”

In our view, HMRC will need to find a temporary solution to this problem to help businesses who import from other member states, to avoid a huge cash flow issue once Brexit is finalised.

For support on all aspects of VAT compliance and planning please contact us at partners@rjp.co.uk

How to get onboard with RJP

Talk to us

Have an initial discussion with a member of the RJP team to identify ways we can enhance your business's growth with our comprehensive support and strategic advice.

Hassle-free migration

Choose RJP and we'll smoothly manage all transitions, handling paperwork, coordinating with your current accountant, and ensuring no deadlines are missed for a worry-free experience.

A pathway to growth

Finally, we will send you the required documents to sign and return, leaving you to continue leading your business, backed by our abundant, responsive advice and support.

2024 Budget in depth – Key changes to capital gains tax

Business Services, Business Tax, Personal Taxation

Budget 2024 In depth – Inheritance tax changes

Business Services, Business Tax, Personal tax

Budget 2024 – What are the new tax rules for non-doms?

Personal tax, Probate and Inheritance Tax

Here’s what our clients have to say

Hear directly from our clients about how RJP's personal, straightforward approach has made all the difference in their business and personal success.

"I just wanted to drop you a short note to say how grateful I am for the support that RJP has provided over the past 4 weeks while our Financial Controller was away. I struggle to comprehend how much work your staff get through during their weekly visits and they are always a pleasure to have around the office."

"I wanted to write and express our gratitude for your help and hard work in getting Probate through and settling all the taxes. I am so pleased that we selected RJP, as your professional help and updates throughout this process have been invaluable. If at any time in the future Probate assessment may be needed, you will be our first port of call. Once again, many thanks to the whole team."

"I would like to take this opportunity to thank you very much for the amazing job you have done navigating us through this whole process. My family and I also really appreciate the care and compassion demonstrated by you and your team in every dealing. Our thanks to everyone."

"Just a quick e-mail from me to thank you for achieving the target for producing the draft accounts – it is very much appreciated and gives a first class impression of your firm. Many thanks."

"RJP provide our company with a complete service which takes the stress and strain away from the day to day running of our accounts! Their understanding of our business and their patience and advice is invaluable."

Get the latest tax tips to your inbox every month

FAQs

At RJP, we understand that keeping a finger on the pulse of your business's health is crucial. That's why we offer management reporting services—think of them as a regular health check for your company. These insights show you the real-time performance of your business, helping you make informed decisions to nurture and grow your enterprise.

We love seeing your business flourish! Growth and improvement are at the heart of our practical advice. From the ins and outs of everyday operations to big-picture strategic moves, we're here to offer clear, actionable steps that can propel your business forward.

We know dealing with the issue of compliance and auditing can be less than thrilling. That's exactly why we're here—to handle the complex stuff so you don't have to. We offer comprehensive compliance services, ensuring everything is up-to-date without you having to wade through a sea of regulations.

Absolutely! There's a world of opportunity out there to support your business financially, and we're well-equipped to be your guide. We can help you understand and access HMRC’s tax relief schemes that are relevant to you and your business, making sure you're not missing out on any potential benefits.

When you need us, we're just a call or an email away—no question is too small or too large. We're known for our quick responses and our fixed fees mean you can reach out without worrying about unexpected costs. Plus, we always keep things simple and straight to the point. We're not just your accountants; we're part of your team, ready to support both your business and personal needs.