With a no-deal Brexit appearing increasingly likely, HMRC is now warning that, in that event, 245,000 businesses would face a tsunami of new customs declarations, tariffs and VAT obligations after 29 March.
The Treasury Committee staged the latest witness session in its inquiry into tax enquiries and resolution of tax disputes this afternoon (6 February 2019). The Government's Making Tax Digital project was slated by FSB and ICAEW during the session, with the FSB making some grave predictions about its impact.
Peers have been debating the Trade Bill - the companion bill to the Taxation (Cross Border Trade) Act – which covers non-tariff barriers in relation to ‘transitioning’ the EU’s trade agreements to UK agreements. An amendment was passed last month to pause the Bill’s passage at the end of the committee stage until detailed proposals on future trade agreements have been published. In the meantime the committee stage continues.
The most significant Brexit-related development of the week was a series of votes in the House of Commons on amendments to an anodyne government motion, which gave different groups of MPs a chance to suggest alternative ways forward on Brexit. The key results were that Parliament failed to ‘take control’ of the Brexit process from government, and MPs indicated that the withdrawal agreement could get parliamentary support if the Irish Border backstop is replaced with something more acceptable to MPs. With the EU repeating its opposition to reopening the withdrawal agreement this will not be achieved easily. There is, however, increasing speculation that compromise might be possible – with both the EU and Labour – around a UK-EU customs union.