Brexit Consultancy Services

VAT Impact Assessment

Whilst it is universally hoped that a deal on trade between the EU and the UK can be agreed as part of the Brexit negotiations (such that “frictionless” trade may continue once the UK has left the EU) businesses need to plan for all possible outcomes.

It is highly advisable that, wherever possible, businesses consider and quantify the potential impact Brexit may have on their trade.

Businesses should not underestimate the benefit of conducting thorough reviews now. Doing so will mean they are well placed to take appropriate action once the Brexit negotiations have concluded.

To assist businesses with preparing themselves for the changes Brexit will bring, the industry leading VAT experts at RBCVAT have developed the Brexit: VAT Impact Assessment.

1. The Fact Pattern

VAT is highly contextual and we recognise that it can quickly become very complex for businesses. Our approach is to simplify VAT for you so you get the advice that suits your business. With all our clients, the first thing we do is learn about them and their business. Simply put, we want to know what they do, where they do it and who they do it for. This is what we call the Fact Pattern.

The Fact Pattern determines all the physical and legal flows of goods and services in all buying and selling scenarios throughout the EU.

It is essential to get this stage correct because it provides the basis for determining the current VAT treatment which helps identify what the impacts of Brexit could be for you.

The deliverable is a final version Fact Pattern which enables us to commence work on creating the “VAT Pathway” that identifies the appropriate VAT treatment in each scenario.

2. VAT Pathway

VAT is highly contextual and we recognise that it can quickly become very complex for businesses. Our approach is to simplify VAT for you so you get the advice that suits your business. With all our clients, the first thing we do is learn about them and their business. Simply put, we want to know what they do, where they do it and who they do it for. This is what we call the Fact Pattern. We shall use this established Fact Pattern to produce an EU VAT roadmap document (we call it a VAT Pathway).

The VAT Pathway contains a series of supply chain models in diagrammatic form with covering notes clearly explaining the VAT charging position and VAT reporting requirements for each relevant party in the supply chain.

The models and notes will cover each EU Member State where you operate and the key objective is to provide you with actionable VAT guidelines which may be updated as the facts change… For example, Brexit!

Our VAT Pathway will provide you with a one-stop-shop guide to the VAT treatment of the goods and services you purchase and supply across the EU, your VAT compliance obligations (with the key dates for VAT reporting overlaid), in addition to cross-referencing VAT treatments with the Sales Invoicing SOP and templates.

3. The Brexit: VAT Impact Assessment

The deliverable will see us build upon the facts documented in your VAT Pathway and highlight the areas of your business exposed to risk because of Brexit. We will quantify that risk and provide you with possible alternate models.

Depending on the nature of your business, our Brexit: VAT Impact Assessment will:

...

1. Identify tariff rates applicable to goods you source and the impact to profitability of incurring tariffs.

...

2. Identify what tariffs might be imposed on sales or components sent to the UK/EU.

...

3. Review the pricing of products which may suffer increased supply chain costs because
of tariffs.

...

4. Highlight cashflow consequences of incurring import VAT on goods entering the UK/EU.

...

5. Identify whether you use advantageous import/export schemes.

...

6. Consider whether alternative business models could minimise or reduce the impact of tariffs to your business.