On 24 June 2016 the UK voted to leave the European Union (EU), how this will affect Lincoln and UK Business is uncertain to say the least.
H M Revenue & Customs had previously announced plans to make the whole tax system digital bringing all business and personal tax information into one place by 2020.
With Brexit and a two year lead in there have been many reports on how this will affect VAT. Currently transactions between the UK and Europe are treated as intra-community transactions with vat paid on assets sent and received, penalties are levied by reference to the filing deadlines.
The introduction of Tax Digital has left businesses wondering what they will need to submit, when and how. One thing for certain is the whole VAT framework will need to be revisited particularly for those businesses that have substantial transactions between the UK and the EU.
The Government have announced that they will set out the revised economic statement in the Autumn Statement which will hopefully provide more certainty and assurances for UK and local businesses.
Some commentators are even predicting that VAT itself could be abolished within years, to be replaced with a consumption tax. This would depend on the nature of any arrangement the UK agrees with the EU, as it is EU membership which has required the operation of a VAT system.