Trust Bloomberg Tax's Premier International Tax offering for the news and guidance to navigate the complex tax treaty networks and business regulations.
By Ben Stupples
Brexit has failed to prompt more businesses to seek certainty from the government on their cross-border taxes, stoking concerns about companies’ plans for the U.K.’s exit from the European Union.
The number of requests from U.K. businesses to guarantee the correct tariffs apply to their EU imports and exports hasn’t risen since Britain’s referendum in June 2016, a tax authority spokeswoman said. Every year, the government processes around 4,000 applications for Binding Tariff Information Rulings, with just over 25,000 active in the U.K., she told Bloomberg Tax in an April 27 email.
The statistics underline how some businesses are failing to prepare for the U.K.’s EU departure. In a survey of 300 companies, published January 2018, the Confederation of British Industry said that just over half had examined different Brexit scenarios and the subsequent commercial impacts.
“It’s human nature to wait and see what the rules are before putting plans into implementation mode,” Daniel Lyons, indirect tax partner at Deloitte LLP, said in Bloomberg Tax’s April 25 webinar on Brexit. “But, with Brexit, I’m afraid that the most cautious and sensible thing to do is prepare for what the least good scenario, which is leaving the EU on WTO terms.”
Typically valid for three years across EU member nations, Binding Tariff Information Rulings (BTIRs) give multinational companies more certainty over the tariffs that apply on their imported or exported goods. In addition, they can help businesses to work out export refunds and custom duties.
BTIRs featured as a topic of discussion in Bloomberg Tax’s webinar, which focused on indirect tax and operational issues for multinational businesses arising from the U.K.’s departure from the EU.
Companies should consider BTIRs as part of their Brexit preparations due to the certainty they can provide, said panelist Simon Sutcliffe, indirect tax partner at accounting firm Blick Rothenberg.
“That said, many firms I speak to have not heard of it,” he said in an April 27 email, suggesting reasons for the lack of growth in the U.K.’s BTI requests. The government has “a publicity issue.”
The U.K. will leave the EU at the end of March 2019. Last month, the U.K. and EU’s Brexit negotiators struck an agreement for the country to have a 21-month transition period following its departure.
The data on U.K. businesses’ use of BTIR comes as the EU considers a new form of the program in a consultation, launched in March 2018, that seeks input form companies and public authorities.
In the webinar, Sutcliffe said he expected the EU to recognize the U.K.’s BTIR system after Brexit.
A spokesman for the EU didn’t respond to Bloomberg Tax’s request for comment on the issue.
To contact the reporter on this story: Ben Stupples in London at firstname.lastname@example.org
To contact the editor responsible for this story: Penny Sukhraj at email@example.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)