Brexit and upfront VAT

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 UK pledges to mitigate business’ Brexit damage from upfront VAT

The Treasury has said the UK will seek to mitigate any cash flow impacts if Britain leaves the EU VAT area after Brexit, meaning companies will have to pay VAT upfront. Meanwhile, business leaders have warned that real cash-flow issues could result from importing small firms being forced to stump up for VAT charges on products bought from overseas before having the chance to recover those costs through their own sales. FSB chairman Mike Cherry said: “Small firms are already having £18bn withheld from them due to the late payment crisis. Brexit should be seen as an opportunity to simplify the hugely cumbersome VAT regime.”

Source:   Financial Times (08/01/2018)   

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