Is Post-Brexit VAT Impacting Trade With English Businesses?
There are a lot of issues surrounding Brexit that are still blurred. Mainstream news outlets and politicians pretend that limited changes to the EU-UK trade agreement will not disrupt trade between Austrian firms and English businesses.
The “everything’s fine” line may hold for large companies but Brexit is impacting small businesses that import and export goods to and from the UK.
Now post-Brexit trade agreements are coming to light, small businesses in Austria have either lost UK customers or are making a loss on the VAT. There are also customs declarations and other paperwork to complete.
Under the new rules, European companies that are shipping goods less than £135 (€155) in value to UK customers are responsible for paying VAT directly to the UK tax authorities – HMRC.
These VAT payments can be postponed for a period of six months to help cash-flow but can also cripple you further down the line when the due date is looming.
This ruling means that businesses in Austria need to register and file quarterly declarations with HMRC. To do that, you have to apply for a tax code and fill in an online form every three months.
Believe me, the business English used by the UK authorities is mind-boggling. Even native English speakers can struggle to grasp the meaning.
Customers are also confused.
When a UK customer purchases goods over £135, the customer pays VAT once the product arrives in the UK. That means shipping costs are more expensive.
UK customers that are accustomed to free shipping are now faced with higher prices when buying goods from Europe. That will inevitably deter them from buying products from businesses in Europe.
How Can Business English Help Companies
VAT may stifle trade between small business in Vienna and UK customers in the short-term, but once people are accustomed to paying shipping fees, they will return for goods that are not available in the UK.
The most difficult task Austrian business owners will face in the initial stages of trading with the UK post-Brexit is the bureaucracy and increase in confusing documentation.
Even you already speak English to a reasonable standard, you will probably feel overwhelmed by the HMRC’s tax forms. A business English course will give you insights into the terminology and help you fill in the form correctly.
English 4 Professionals offer Business English courses in Vienna to help you navigate post-Brexit bureaucracy and enable you to deal with English businesses more effectively during negotiations and client sourcing.
All our tutors are native English. For more information get in touch today.
Glossary of terms
the due date is looming – getting ever closer
mind-boggling – very confusing
That will inevitably deter them – it will certainly put them off
VAT may stifle trade – suppress, repress, prevent from continuing