28 11 2017

UK Publishes Legislation For Post-Brexit Cross-Border Taxes

On November 21, the UK Government published the Taxation (Cross-border Trade) Bill, previously known as the Customs Bill, providing for the introduction of an independent customs regime for the UK when the country leaves the European Union.

According to the Government, the Bill will allow the UK to set and collect its own duty on goods coming into the country and will allow the government to implement different outcomes of the EU negotiations, including an implementation period.

The Chancellor of the Exchequer, Philip Hammond, said: "Britain is a great trading nation and innovative UK businesses are central to the success of our economy. This Bill represents the first step in setting up an independent UK customs regime and reaffirms our commitment to deliver a smooth transition for businesses as we leave the EU."

The Government stated that the Bill will allow the Government to:

charge and vary customs duty on goods;
specify which goods are subject to what duty;
set preferential or additional duties in certain circumstances – for example:
to secure the benefits of global free trade while protecting domestic industries, such as by providing necessary and proportionate safeguards against unfair trade; and
to support developing countries by offering preferential treatment; and
ensure that value-added tax (VAT) and excise legislation function effectively upon EU exit.
Other post-Brexit trade provisions were included in the Trade Bill, which was introduced to Parliament on November 7.

International Trade Secretary Dr Liam Fox said: "As we leave the European Union, the Trade and Taxation Bills will help us seize this unprecedented opportunity to boost British businesses and support a global trade system that works for the UK."

The Bill, first announced in the Queen's Speech, follows the publication of the White Paper Legislating for the UK's future customs, VAT, and excise regimes in October, which set out the key objectives of the legislation.

In response to the publication of the Bill, the British Chamber of Commerce (BCC) said clearer guidance is needed from the UK Government on the future of the UK's VAT regime.

Anastassia Beliakova, Head of Trade Policy at the BCC, said: "Businesses will expect this Bill to provide continuity and alignment with the Union Customs Code, and help establish future customs cooperation with the EU. But it is also imperative that the Government consults with business on how to improve our customs procedures as we leave the European Union. Firms tell us that they want clarity on the future of the UK's VAT regime, and what our exit from the EU will mean for cross-border liabilities. HMRC must be given more resources, and adopt a clear focus on customer service, to enable them to support exporters and importers as they navigate the UK's exit from the EU."