What's up Doc?
The United Kingdom (UK) has voted to leave the European Union (EU). The (Br)exit will require a review of how VAT and Customs will operate going forward. At high level we set out our thinking about what the post-Brexit world might look like for your European operations.
Increase of Customs duties?
For Customs, much will depend on whether UK and EU agree a 'Soft Brexit' (retaining some level of access to each others Market) or a 'Hard Brexit' (no favored access). Anyhow, after Brexit you must pass through Customs when moving goods either way, and likely pay import duties. This is harder as transacting is likely to become more expensive as a result. Moving your Central European warehouse from UK to the continent may be an option.
VAT, no hike expected.
VAT reporting on selling goods and services is likely to change. Your VAT codes (to apply for the right VAT ) and 'mappings' in your IT system may need to be altered. Eventually we don't expect a change of VAT rates, but reporting may become more expensive and complex.
Doctor, Doctor, bring me the news!
This is it for now folks. There is not much more to tell. Nevertheless it would be our advise to check your business in Europe and potential changes for your operations after Brexit. You won't find all answers yet, but you will be ready once Brexit becomes reality in 2019.