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What is the impact of current Brexit developments on VAT and customs?

Bob van der Steen Bob van der Steen

Prime Minister Boris Johnson (PM Johnson) has concluded a new Brexit deal with the EU. The intention was to submit this new deal last Saturday to the British House of Commons for a vote. This has not happened, as amendments (Letwin amendment) have been accepted that prescribes that first all legal arrangements regarding the Brexit must approved, before the EU Brexit deal will be presented for approval. Sceptics fear that PM Johnson will use tricks to finally still achieve a no-deal Brexit. PM Johnson has requested the EU a delay for the Brexit date in his own particular way. Question is whether his request is legally valid. The request does not contain his signature and in a second, separate, letter he writes to the EU that further delay is not in the interest of any involved party. And so the story continues...

What about the VAT and customs regulations?

Should this new deal either this week or later be approved by the House of Commons, then nothing will change for this moment regarding VAT and Customs legislation (up to and including December 31 at the latest). Up to that moment in time a transitional arrangement will be in place to let the companies accustom to the new situation.

If however the House of Comments votes otherwise and a no-deal Brexit will be the consequence, the Brexit switch will be turned in the night of October 31st  to November 1st, 2019. Thus, you will have to face VAT and Customs rules that are in place for countries outside the EU.

Nobody knows the final outcome of this process. Is the trade with the UK of interest for you, please prepare yourself for the worst case, should you not already have been doing this.