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» Ship of Fools   » Community discussion   » Purgatory   » Shake it all about: Brexit thread II (Page 63)

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Source: (consider it) Thread: Shake it all about: Brexit thread II
chris stiles
Shipmate
# 12641

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quote:
Originally posted by alienfromzog:

2) This is not what Farmers were promised. The Leave Campaign specifically promised to match EU subsidies (which is just one of the ways that you know the £350m claim is ridiculous given that the Common Agricultural Policy accounts for around half of EU funding and a huge chunk of the money that comes back to the UK from Europe). Then again, no-one else is going to get what they were promised so why should Farmers (and Landowners) be any different…

OTOH on a political level it may not be a terrible strategy if you adopt their presuppositions.

The Tory calculus appears to be that the only strategy open to them is to push a culture war and buy off the business end of their base with low taxes - seen in recent announcements from the PM.

In that world there will have to be (painful) cuts - and shoring up the votes of former Lib Dems by pushing the green angle may be seen to be worth the relatively small cost of pissing off farmers.

Posts: 3910 | From: Berkshire | Registered: May 2007  |  IP: Logged
alienfromzog

Ship's Alien
# 5327

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quote:
Originally posted by chris stiles:
quote:
Originally posted by alienfromzog:

2) This is not what Farmers were promised. The Leave Campaign specifically promised to match EU subsidies (which is just one of the ways that you know the £350m claim is ridiculous given that the Common Agricultural Policy accounts for around half of EU funding and a huge chunk of the money that comes back to the UK from Europe). Then again, no-one else is going to get what they were promised so why should Farmers (and Landowners) be any different…

OTOH on a political level it may not be a terrible strategy if you adopt their presuppositions.

The Tory calculus appears to be that the only strategy open to them is to push a culture war and buy off the business end of their base with low taxes - seen in recent announcements from the PM.

In that world there will have to be (painful) cuts - and shoring up the votes of former Lib Dems by pushing the green angle may be seen to be worth the relatively small cost of pissing off farmers.

My prediction is this; when the wealthy landowners (including many who are in no way actually farmers - such as Paul Dacre, Daily Mail editor) realise how much they will lose, they will complain and the government will quietly change the plans...

AFZ

Posts: 2122 | From: Zog, obviously! Straight past Alpha Centauri, 2nd planet on the left... | Registered: Dec 2003  |  IP: Logged
Eutychus
From the edge
# 3081

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As someone who occasionally bills work to the UK is registered for VAT, I've been wondering how long it will be until the implications of Brexit for business VAT transactions - a pretty important tfact of business life, one which takes a big part of our accounting time - will dawn on the UK government.

The answer appears to be about now.
quote:
In a briefing sent to MPs, the British Retail Consortium, which represents 70% of the UK retail industry, said: “If the bill becomes law without any commitment to inclusion within the EU VAT area, UK businesses will become liable to pay upfront import VAT on goods being imported from the EU-27 for the first time.”
[Roll Eyes] [brick wall]

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

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Cod
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# 2643

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The article sounds a bit odd. Presumably, as a matter of UK law, importers have to pay VAT on imported goods from outside the EU (and then recoup the VAT via on-sale) as per the UK's VAT legislation. So, whether or not importers will have to pay VAT up-front on goods from the EU is simply a matter for that legislation, which could be amended so that this is no longer required. Which means:

quote:
Labour and Tory MPs and peers said that the only way to avoid the VAT Brexit penalty would be to stay in the customs union or negotiate to remain in the EU-VAT area.
is at best misleading reporting or at worst, bollocks.

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"I fart in your general direction."
M Barnier

Posts: 4229 | From: New Zealand | Registered: Apr 2002  |  IP: Logged
Eutychus
From the edge
# 3081

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AIUI, an establishment based in the EU exporting something outside the EU (eg Switzerland) does not charge VAT on the bill at all. (At least, that's the way it is for services).

When exporting (again, at least as far as services are concerned) to another EU country (eg the UK at present), VAT is not charged either if the recipient is registered for VAT (although it has to be declared in a piece of accounting of which the net effect is zero).

If the UK maintains some sort of VAT system post-Brexit (and nobody has suggested it's disappearing...) then I suspect for goods at least, they'll want to charge VAT on imports at the time of purchase. That's the only practical way of keeping track.

Even if companies can offset the VAT they pay against the VAT they get in from their customers (paying VAT to the company when they pay their invoices) when the company pays its VAT bill to the tax man(1), post-Brexit it sounds like they will have to pay the VAT for imported goods up-front instead of simply declaring a notional amount. Not only is this more complicated from an accounting point of view, it is going to make a huge dent in their cash flow.

The only ways I can see to avoid this are 1) for the UK not to charge VAT on imports, which would put domestic sellers at at a huge competitive disadvantage compared to imports, unless VAT was abolished altogether 2) keep UK VAT within the EU system(2) (or possibly 3) tweak the rules so VAT on imports is paid at a later date, which is probably what is going to happen, but this would I think be an accounting nightmare).

How am I not surprised the UK government hasn't had a plan to address this to date? [Roll Eyes]

This is complicated(3), which is probably why it hasn't made more news as it's hard to explain, but it is indubitably not trivial.

==
(1) the thing to understand about VAT is that the state basically outsources its collection to companies registered for VAT; for a given month, you send the tax man the difference between all the VAT you've got in by invoicing it and the VAT you paid on your own purchases.

(2) Note that from within the EU-27 system, meanwhile, other things being equal the UK not being in its VAT system will not have any such effect. All I'll need to do is change one piece of boilerplate on my bills and stop having to bother declaring VAT on invoices to the UK in the VIES system. This is a wholly UK headache.

(3) I've probably got some of the above wrong despite being registered for VAT and invoicing both other EU countries and third countries. Open to corrections.

[ 08. January 2018, 05:44: Message edited by: Eutychus ]

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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy

Posts: 17565 | From: 528491 | Registered: Jul 2002  |  IP: Logged
alienfromzog

Ship's Alien
# 5327

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Some more thoughts From Simon Wren-Lewis

AFZ

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Everyone is entitled to his own opinion, but not his own facts.
[Sen. D.P.Moynihan]

An Alien's View of Earth - my blog (or vanity exercise...)

Posts: 2122 | From: Zog, obviously! Straight past Alpha Centauri, 2nd planet on the left... | Registered: Dec 2003  |  IP: Logged



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