Led by their ambition to be an advanced country in tax authority, the government levies hikes and spending plans as new tax changes in the UK sets out for the remainder of 2021.
The trade benefits that the UK used to enjoy when they were part of the single market are no longer at reach. Now that the departure from the EU was finalised, various tax changes are brought to the table, with an expected resonance through the economic walls of the UK.
Given the circumstances, how are they faring the post-Brexit tax ramifications?
Before the divorce was completed, a Trade and Cooperation Agreement (TCA) was drawn to outline trade provisions, mutual assistance, and tax matters. However, it did not spell much details when it comes to the latter (except new rules of origin).
TCA’s significant impact in respect of tax is the requirement for rules of origin. It was amended in the agreement that goods originating from either EU or UK are secured without tariffs.
Aside from Brexit, the pandemic contributed to the changes in 2021 as well. There have been deferments in VAT payments, and reductions in VAT rates for the hospitality and leisure industry.
But this is just the tip of the iceberg. Take a look at the new tax points that apply to your firm moving forward.
The separation of the UK from the bloc boiled down to restraining British goods and services to move about freely in the single market, which resulted to tax hikes and changes. Administrative actions imposed post-Brexit led to increased port declarations, paperwork, permits, what have you. There is a certain degree of knowledge and technicality needed to coordinate with today’s tax authority systems and without them, mistakes can cost you delays.
Tariffs are still also present in trading conditions. Depending on the point of origin, goods with components imported from elsewhere are still subject to tax regardless of whether you’re moving products to and from the UK and EU.
Simply saying, compliance became more stringent for traders, especially those coming from the United Kingdom, and its constituent countries.
Facing post-Brexit and post-pandemic era, various tax changes in the UK are set for the remainder of 2021 and beyond, and keep in mind that these wide-ranging reforms are still in their infancy. Developments can still happen along the way, that’s why it’s imperative that your organisation is ready for any change that comes your way.
However, if you’re finding it hard to keep up with these government mandates, outsourcing your back-office finance and accounting to a reliable partner is a solution you can consider trying.
D&V Philippines has over 500 F&A professionals with updated knowledge on the latest regulations and compliance in different countries. Grab your copy of our latest whitepaper D&V Philippines’ Solutions to Modern Accounting Firms to know how our accountants can lead your accounting back-office efficiently, or get in touch with us for a free consultation.