Britain’s exit from the European Union is looming. But, as it stands, a deal has still not yet been made. Whether one is agreed by ‘Brexit Day’ or not, it’s very likely that there will be an impact on VAT refunds from European trading partners for eligible businesses.
Here, we outline what this effect is likely to be, and how you can deal with it.
The UK currently has access to the single EU VAT refund system. There are standard deadlines, forms and claim periods across the 28 member states, and these are submitted – like the rest of modern accounting – digitally through technology. The probability of this benefit being available come Britain’s exit, however, is slim to none – whether there’s a deal or not.
In the case of a no-deal, UK businesses will be forced to get to know the requirements for every single country in the EU. They will also need to complete their claims in a paper format. Considering that so many businesses are reaping the rewards of the efficiency digitalisation provides, to have an aspect of their accounting that can’t be done in such a manner will add quite the administrative burden. This will cost time and money as a result.
What was traditionally an easy VAT refund process could transform into meeting a cumbersome number of criteria just to fill in a claim. It’s likely that a much more severe level of evidence will be required, for example.
Additionally, there may be a range of different time constraints for the various EU countries that businesses are claiming their refund from. Without a deal, it’s expected that applicants will have to submit their claims in the native language of the country. Some may even demand the need to hire a fiscal representative.
Consequently, with all the variations and extra work required, it is anticipated that some businesses could experience a delay in receiving their VAT refund.
Companies would need to get familiar with this new way of claiming VAT refunds ahead of the UK’s current leaving date of 31st October. This is only in the situation that no agreement is reached – otherwise, enterprises can expect a transitional period that provides the essential time to adjust their processes.
The necessity for increased knowledge and administration, coupled with the lack of time, will mean that some organisations may feel that it’s not worth claiming their VAT refunds at all.
That’s why it pays to have an expert accountant who will be able to take the entire process of VAT off your hands – no matter how complex it gets.
Nabarro Poole offers the most effective advice and guidance, tailored to your business. Plus, our services extend to the likes of statutory accounts, payroll, tax planning and budgeting and forecasting. They’re fully comprehensive. So whatever your requirements, we’ll be able to fulfil them.
We believe contingency planning is important – from changes like Brexit to the full digitalisation of tax. At Nabarro Poole, we’re always ahead of the transformations which impact the accounting industry. To look forward, get in touch with our team today.