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UK importers could face upfront VAT sting under new Brexit legislation

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Legislation to be considered by MPs today could have considerable ramifications for importers of bicycle goods.

Alterations to the Taxation (cross-border trade) Bill may result in importers having to pay VAT upfront on goods stemming from the European Union. The bill is now on its second reading in the Commons.

According to The Guardian, around 130,000 UK import businesses stand to be affected, should the legislation pass. One of many law changes related to the Brexit transition, this particular amendment to trading rules has been met with uproar among UK business leaders and opposition MPs, who are concerned that the new rules would cause cash flow issues, among other strains.

On Sunday night the Conservative chair of the all-party Treasury Select Committee, Nicky Morgan, said that an urgent investigation would launch to fully explore the potential impact of such a change. She also outlined plans to write to HMRC to ask about planned contingency measures to safeguard importers from damage.

Speaking on the proposals, Labour MP Chris Leslie targeted the Leave campaign stating that this “is yet another aspect of Brexit that the Leave Campaign failed to inform the public about”. He further suggested that amendments would be tabled by his party to secure the UK’s place in the EU VAT area.

Read the full story here.

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