VAT and Excise (Post-Brexit)

Value Added Tax

Changes are made to value-added tax legislation conditional on the outcome of Brexit negotiations. The following provisions are accordingly subject to the ultimate outcome and the position that applies after Brexit.

Value-added tax law is amended to disapply the concept of an intra-EU acquisition, which is the supply of goods between businesses in the EU. After Brexit, in the absence of any new arrangement, goods will be treated as imported from or exported to the EU for VAT purposes.

The current treatment of import VAT (from outside the EU) will apply. It is due at the same time and from the same person who is liable to customs duty.

Provision is made for the treatment of EU judgments in the area of VAT post withdrawals.

Excise Duties

The revised legislation on excise duties is conditional on the outcome of Brexit negotiations.

The legislation provides for a schedule with regulation-making power for HMRC in relation to excise duty. That definition covers alcohol, liquor, hydrocarbon oil, put tobacco, air passenger duty, betting and gaming duties. The legislation allows HMRC to amend the relevant legislative schemes to keep the excise regime operational. The legislation is in sufficiently broad terms to deal with a range of possible outcomes to the negotiations.

HMRC is empowered to make regulations in relation to obligations on revenue traders for the purpose of giving effect to international excise arrangements, for the facilitation of collection administration and enforcement of excise duty.  Provision is made for the substitution of  UK law for EU excise legislation.

HMRC may apply excise duty on persons outside the UK if the person sends or arranges for the sending of excise goods in a postal packet to a UK based recipient. Regulations may specify particulars. They may require persons to register with HMRC in relation to excise goods in postal packages sent from overseas.

Provision is made for a positive Parliamentary resolution procedure in respect of the more significant and substantive changes that may be effected by regulations.  These include in particular

  • any amendment of existing Acts of Parliament,
  • restriction of a relief or  rebate,
  • an extension of goods to which s duty is a chargeable
  • change in rate.

The legislation provides wide powers for Ministers to make regulations relating to the VAT, customs and excise as necessary to give effect to withdrawal from the EU. The range of existing EU legislation is converted into domestic law.

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