Prior to Brexit, sales of goods to and from the UK were subject to the EU’s acquisition and dispatch system. After a vote to leave, these same goods may become exports and imports like any other good, and will be subject to customs duties and charges.

The EU maintains the authority to determine the framework for VAT rates across all member states. As such, it gives national governments the freedom to set their own rates of VAT as long as long as two conditions are adhered to.

Firstly, a standard rate of no less than 15 per cent must be applied to all non-exempt goods and services, and secondly, governments can only apply for reduced rates for goods and services listed in the VAT Directive. The UK government currently sets the rate of VAT at 20 per cent.

VAT is, on the face of it, one of the simplest tax rules out there. All goods are liable for it unless they’re everyday essential items, in which case they aren’t. However, there is a huge array of exempt, zero-rated and reduced rate goods in Britain, making the national VAT rules far from explicit.

Jaffa cakes, tampons, crisps and nuts, and even Cornish pasties have, for example, all been at the centre of heated debate and courtroom wrangling in the past, as policy makers tussle with brands to determine which items should be considered essential.

Taking back complete control over the VAT rules will make it easier for the government to use the tax to regain control of the economy in the aftermath of Brexit. The chancellor, with free reign to set VAT parameters along his own lines, could decide either to hike up VAT to increase revenue in the short-term, or lower it to get consumers spending again.

There are a number of practical hurdles that are likely to crop up once the UK is no longer a part of the EU’s customs union. Both exports and imports to and from the EU will need to be cleared through customs, costing companies time and money.

European businesses importing from the UK may become less incentivised to do so, as EU customs duties will likely apply to British products. Meanwhile, UK firms that rely on raw materials and goods from EU member states could face additional costs, as the British government might extend customs duty tariffs to imports from the EU.

 

 

 

Testimonials

Total Accounting have taken a great weight off my shoulders by sorting out the mess due to non-submission of tax returns for a number of years . They even managed to get large rebate in the process and since then ensure my liability is kept to an absolute minimum. Very informal and pleasant as well as efficient and professional

Tony Green - | Cramlington

I was very happy with the fast and efficient response and service that I received from this company.
I was appointed an executor to a very complicated last will and testament, I also found that I needed professional advice quickly to sort out a big financial dispute between two other estates that had bequeathed money to charities and also to the deceased estate that I was appointed to look after. 
The main problem was that the amounts of money had been bequeathed using different methods to calculate percentages to third parties. 
I felt very lost. 
With this companies help I also found out that financial irregularities had occurred, I could not have work this out by myself.
Fortunately I got the financial help and advice I needed alongside easy to understand answers to my questions from this company, 
With their help I now have managed to sorted out the all the complicated problems of money transferring between different people in a series of wills accurately.
I can recommend them, and I would happily go back to them if I were needing any financial accounting in the future.

Robert E Etherington - | Sunderland

Total accounting are given all our invoices and receipts, and they do everything. This saves all the work we used to do ourselves. Not only that, but they also look after our wages as well as providing assistance and advice throughout the year, all included in the charge. By following their suggestions, we have also made savings in our tax liability. As a small business their expertise and support is really appreciated.

Ian Clarke - Ian Clarke Gardening Services | Newcastle upon Tyne

Total Accounting have dealt with my accountancy and tax affairs since starting as a self-employed counsellor about 5 years ago.

 Advice and service received has been fantastic’ and yet the fees are very reasonable.

 Highly recommended.

Maggie Hallam - | Washington

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