Covertax’s partnership with VAT Forum

Covertax has been a partner in VAT forum for much of the last twenty years. It is through VAT Forum, and also our involvement with the International VAT Association, that we gain not only a knowledge of VAT in other countries, but more importantly an understanding as to how the law works. And we make great contacts with other consultants which we then use for our international client.

The next VAT Forum conference is in the sun. The programme looks pretty interesting, but so does the location!

No Deal Brexit – time limit for EU VAT Refund claims

In the event of No Deal (leaving on 29 March 2019), the time limit for submission of EU VAT refund claims through the portal is 1700 on Friday 29 March 2019. If your claim is late, it may not be met.

After 29 March, claims will revert to the old paper system, known as “13th Directive VAT Refund Claims”. This does rely upon the UK and the EU27 agreeing on reciprocity. I have no indication that this will not be the case. That does mean being able to submit original documents. So those of you who have got into scanning and then shredding your purchase invoices, please retain original invoices for your 13th Directive VAT Refund claims. I am no idea how strict the process will be after Brexit, but it is the norm for “copy” documents to be rejected – that could be a very expensive clear desk policy! It also means sending your claims off to an office for each country. And returns to the days when you need to be sure that your claim reaches the office – lost documents in transit is not excuse. I recall on particularly large claims, I had to take the documents myself and deliver them by hand as we could not get cost effective insured couriers where there was a high value. Instead we relied on our PI policy and an upgraded travel insurance – again costly but amazingly more cost effective than getting an insured courier.

And they said Brexit would get rid of red tape! Clearly not for VAT.

Naturally, we can assist with claims.

No Deal Brexit – Incoterms and Contractual Terms

Urgent. Please check your contractual terms and the incoterms you use. First of all, make sure the incoterms actually reflect your contract. That may seem obvious, but often it is not the case.

Secondly make sure you still want the same Incoterms (or contractual terms) after Brexit. A real example is a company which had DDP (Delivered Duty Paid) terms on an intra EU movement. Apart from the fact that this probably made the supply in the other member state all along (it had been treated as an intra-community movement of goods), it means that following Brexit the UK company will have to have an EU VAT ID (in the particular case, German), pay import VAT and Duty, and then account for the tax in Germany (as a non-established entrepreneur tax on sales may be reverse charged, but this would need to be checked out). This came as a surprise – I bet it did!

We can help with EU VAT registrations and compliance.

Plastic packaging consultation

Following the announcements in Budget 2018, the Treasury has published its plastic packaging consultation. The consultation period closes on 12 May 2019.

It is proposed, subject to consultation, that for produced or imported plastic packaging that doesn’t include at least 30% recycled content, a new tax will be levied on the full weight of the packaging product, at a flat rate set per tonne of packaging material.

This may be straightforward for a single manufacture of a product, and the consultation seeks views on the position where there are multiple manufactures in the production process. For imported goods, the tax would be charged at the point that goods are released into free circulation in the UK. The preferred position is a single threshold at 30% recycled content, though the consultation also looks at an alternative proposal for multiple thresholds with high/medium/low rates.