“We’re Brits. We’ll muddle through,” concluded Alan McLintock, Senior Manager of European Indirect Tax Strategy, Ford Motor Company, at a recent Bloomberg Tax Seminar, Brexit: Deal or No Deal? What You Need to Know Now.
Alan was joined by Daniel Lyons, a partner in the Deloitte Tax Policy Group, and Kelly Stricklin-Coutinho, a barrister at 39 Essex Chambers, on November 15, 2018 (fittingly, the day the Draft Withdrawal Agreement was published) to discuss the potential impact of Brexit on VAT and E.U. state aid – and how businesses can prepare, when so many parameters remain unknown.
On State aid, Kelly Stricklin-Coutinho cautioned that under the terms of the Withdrawal Agreement, the E.U. Commission will have jurisdiction to investigate abuses long after the U.K. withdraws from the E.U. The Commission is authorized to initiate proceedings regarding U.K. State aid granted before the end of the implementation period (formerly referred to as the transition period) for up to four years after the implementation period ends. Therefore, she advises companies to consider potential State aid claims carefully, and marshal evidence with this timeline in mind.
As for VAT, Daniel Lyons advised companies to avoid both panic and politics, and focus on preparing for the greatest possible change – with particular attention to compliance, systems and supply chains.
As for the U.K.’s relationship with the E.U. post-Brexit, Alan McLintock noted that the U.K. intends to leave the E.U.’s Customs Union, Single Market and State aid regime, in favor of a U.K./E.U. Free Trade deal which is still to be negotiated.
Click here for a recording and slides for Brexit: Deal or No Deal? What You Need to Know Now.
By Michael Webb, Senior Editor, and Joanna Norland, Technical Editor, Bloomberg Tax
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