Sort 'no-deal' Brexit preparations now, tiny traders urged
Officials from both HM Treasury and HMRC have joined those urging creatives and other small businesses to plan for a 'no-deal' Brexit.
In fact, traders ought to take a minimum of three steps if they want to ensure their outfit can continue trading with the EU if the UK leaves without a deal in place, the Revenue says.
The first step is to register for an Economic Operator and Registration Identification (EORI) number -- something that traders won't have if they have only ever traded inside the EU.
'240,000 traders need to act'
Worryingly, some 145,000 VAT-registered businesses that trade with the EU but not the rest of the world have been identified, as have a further 95,000 businesses that trade with the EU but are not VAT-registered.
"This means an estimated 240,000 businesses need to take action to continue trading with the EU if no deal is reached," the Revenue said, reflecting on is figures.
However, officials have reassured that getting an EORI number is free and takes only about 10 minutes.
Steps two, and three
The second step that HMRC says needs taking is for traders to consider how they want to make customs declarations (typically by using an agent), and the third step, for importers of EU goods, is to register for new Transitional Simplified Procedures.
Meanwhile, and specifically in the creative industry’s gaming sector, the Treasury has reminded that digital sales of video games via online platforms (or marketplaces) will continue to be considered a supply of service, as opposed to a supply of goods.
"In the unlikely event of a no-deal scenario," Treasury minister Mel Stride told gaming body TIGA, "the technical notice ‘VAT for business if there’s no Brexit deal’...confirms that the main VAT 'place of supply' rules will remain the same for UK businesses."
More concerning should freelance consultancies supplying digital or gaming services be registered with VAT MOSS, "additional charges may apply", the minister warned.
He added that further help on the possible changes such traders might encounter could be found in the government's guidance, and reading it sooner rather than later, was recommended.
Mr Stride said: “We want businesses to be able to continue trading with minimal disruption in any scenario but we also know that people tend to leave things until the last minute and we would urge against that."
But the former businessman's alert comes too later according to the Federation of Small Businesses, which says a no-deal Brexit, almost regardless of steps now taken by traders, will cause "damage".
"For many, it is already too late to prepare for this," the federation says. "Half of small firms that said they would be impacted by a no-deal Brexit, told us they needed at least two months to prepare. A further third won’t be in a position to be ready whatever happens."
The FSB added that the optimum time to have told small traders to prepare for a no-deal Brexit, assuming the UK leaves on March 29th 2019, was the end of January, at least according to half of firms it polled who said they stood to be affected.
6th March 2019