Preparing for a no-deal Brexit

Whilst we don’t have a crystal ball, we do share the hope that a ‘hard Brexit’/no-deal won’t happen, given that it is the only thing currently on the cards at the time of writing we wanted to point you to some of the resources that HMRC have recently published.

HMRC seem to be putting out guidance in the form of Statutory Instruments (SI) for the next most immediate threat, which is currently a no-deal Brexit on 12th April. Some of our customers have received a letter from HMRC publicising many of these resources listed below.

As things develop, we will try to help minimise the impact on your business, but we strongly suggest you keep a close eye on the output from HMRC regarding this as there is also lots of specialist advice regarding particular business sectors.

The HMRC Resources that may be useful for you 

HMRC have published a portal, where companies can answer a few simple questions about their business and then get access to the documents and advice most relevant to them, it can be found at:

• https://www.gov.uk/business-uk-leaving-eu 

They have published advice for companies importing goods:

• https://www.gov.uk/guidance/get-a-uk-eori-number-to-trade-within-the-eu
• www.gov.uk/hmrc/eu-simple-importing
• www.gov.uk/hmrc/customs-authorisation-changes
• https://www.gov.uk/guidance/customs-procedures-if-the-uk-leaves-the-eu-without-a-deal 

VAT specific advice has been issued, with EU trade being treated much the same way as non-EU trade currently is. Note, the VIES lookup service will still be available but will not include UK businesses:

• https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal 

Import VAT will be handled using VAT Postponed Accounting (from 11:00pm on 12th April) with the VAT accounted for in your VAT return rather than payable immediately:

• https://www.gov.uk/guidance/accounting-for-import-vat 

EC Sales List will end but care needs to be taken with the final returns:

• https://www.gov.uk/guidance/exporting-and-importing-goods-if-the-uk-leaves-the-eu-with-no-deal 

Intrastat (Supplementary Declaration) will no longer be required, the equivalent data will be collected through the customs declarations. This and other impacts are discussed in this impact assessment:

• https://www.gov.uk/government/publications/hmrc-impact-assessment-for-the-movement-of-goods-if-the-uk-leaves-the-eu-without-a-deal/hmrc-impact-assessment-for-the-movement-of-goods-if-the-uk-leaves-the-eu-without-a-deal#sectiond 

It would be a good idea to consider the changes you will need to make in you Dynamics NAV or Dynamics 365 Business Central system in the event of a no deal exit on April 12th (or later). These could include (but are not limited to) the following changes:

• Switch General Business Posting Groups on customers and vendors from EU to a new one to reflect their new Export status, maybe EU Export to allow a reporting difference from Export (though legally there will be no difference)
• The VAT Business Posting groups is where I’d expect to see a change and a new posting group created unless a relevant existing one can be used. This would allow the old setup to be used where necessary and the new setup for existing and new orders
• VAT Statement setup will require changes, to boxes 2,4,8 and 9 - the VAT statement will need to include any new VAT Posting setup
• Orders that are not fully completed will need to be reopened, the quantity reduced to the amount shipped or received so far and the balance entering on a new order using the new posting group - any unposted warehouse documents will need to be deleted and recreated from new orders
• Any orders that are released but have no transactions yet (shipments or receipts) will need to be revalidated with the correct VAT Business Posting groups