Coffee & a Brexit anyone?
Liz Maher, of Centurion VAT, previews our upcoming webinar on the implications of Brexit for the VAT system, and what that will mean for housing organisations throughout the sector
No meeting at the moment can pass without the question of Brexit and VAT arising it would seem and that was the case as I chatted with Kevin Howell (director at CIH Cymru) over a recent coffee. I was touched by his concern that I may have a quieter life going forward!
“Seems unlikely”, was my response – with HMRC reporting that in the UK VAT delivered over 22% of all tax generated in the year to March 2016 making it now the 2nd largest source of revenue for the Chancellor a VAT system is unlikely to disappear as we approach “B” Day.
It’s understandable that many think VAT is a European Tax and to be fair that’s where it started for us in the UK on joining the European Union in 1973 – 1st April – to be specific – always a good date to start a new tax system! But that Indirect Tax system of generating tax revenues as transactions flow through a supply chain has proved so effective a system in comparison to other tax regimes such as a Sales Tax, that it has now been replicated across 115 countries around the globe. Drop into countries as far apart as China and the Bahamas and you’ll find a VAT system in place.
It’ll be vital for all types of businesses across the UK to keep up to speed with what a post Brexit VAT system could look like. Indeed, for trade sector bodies it will be vital to ensure they lobby UK Government on the VAT areas where change would be a benefit or adverse changes, that might be planned, fully explored before implemented into UK legislation.
What will happen to the extensive range of VAT Zero Rating reliefs we operate in the UK for example; what ideas for further reduce rating might be considered – these will impact on organizations just based in the UK so it’s not just about businesses or organization that buy or sell into Europe that need to keep pace with the issues.
I think it’s also important to recognize that pre Brexit the VAT rules look likely to continue as they are at the moment and with the recent EU Action Plan announced in April 2016 we need to consider how changes planned to plug the EU VAT Gap of around E170bn will impact here in the UK.
As we drained the last of our coffee Kevin wondered aloud whether I’d be about in September for a chat re Brexit with the wider CiH community to update you all on where things are moved to at that point – “more than happy to” was my response - with the rate of change we’re currently experiencing in the UK business and political arena who knows what we’ll have to add to the commentary by then!
Catch up in September and remember “VAT is a Simple Tax”!