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Impact of EU Exit on Businesses Trading Exclusively with EU

  • Research Overview: HM Revenue and Customs (HMRC) commissioned IFF Research to explore the trading behavior of businesses exclusively trading goods with EU member states and the anticipated impact of the UK’s exit from the EU. The research included a quantitative survey of 847 businesses (730 VAT registered, 117 not registered) and qualitative interviews with 40 businesses (36 VAT registered, 4 not registered), conducted in summer 2019.
  • Trade Importance and Frequency: A significant majority (62% VAT registered, 65% unregistered) indicated that EU trade is essential to their business. The primary reasons for importing from the EU were product availability (74% VAT registered) and quality (70% unregistered). Most businesses engaged in EU trade monthly or less frequently, with VAT registered businesses reporting stable trade values, while many VAT unregistered businesses noted increases, often influenced by customer demand and stockpiling before EU Exit.
  • Preparations and Expectations Post-EU Exit: Only 32% of VAT registered businesses and 51% of VAT unregistered businesses made preparations for EU Exit, primarily due to uncertainty. Post-exit, businesses anticipated challenges such as tariffs and administrative burdens, with many planning to continue using intermediaries for customs support. A majority expressed a desire for more specific information from HMRC regarding changes in trading procedures and customs requirements following the exit.

Source gov.uk

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