On Thursday 23 June 2016, the UK public voted to leave the European Union.
Referred to as ‘BREXIT’, the vote will result in the UK no longer being required to comply with the Union’s EU VAT regime after a two-year negotiation period. Whatever the final settlement is, it will likely result in more VAT compliance complexity for companies selling from or to the UK.
For example UK companies will lose the right to use the simplified 8th Directive online VAT recovery system for their EU VAT reclaims. Instead, since they will be non-EU companies, they will have to resort to the paper-based 13th Directive regime. This is slower, and prone to challenges from the tax authorities.
Watch this space for more detail in the months to come.