A no-deal Brexit...

A no-deal Brexit...
A no-deal Brexit...

We may very well be heading towards a no-deal Brexit. Its interesting in this context to read the transcript of May's (the month, no the person) Parliamentary debate on the VAT position for tour operators in the event of a no-deal Brexit. Really promising that this has reached Parliament's agenda, but not sure I quite agree that it is "highly unlikely" that UK tour operators will be required to register for VAT in other member states.

(For context, if we leave without a deal, only the margin on UK travel will be standard rated under UK TOMS. However, the literal interpretation of EU TOMS law is that all non-EU tour operators should account for local EU VAT in the member state in which travel takes place...albeit not widely enforced to date).

The bottom line is that we don't know yet how UK tour operators may be expected to account for VAT on "TOMS supplies" post-Brexit, and so the requirement to register locally in the EU remains a possibility. The Government may of course be right in their thoughts that EU travel supplied by UK tour operators will be taxed nowhere. However, much of this will indeed depend on the deal-or-no-deal position, the reaction of the EU Commission, and individual EU member states. So, my advice at the moment would still be to consider your exposure with EU travel, and keep up-to-date with VAT news, as we are not quite there yet!

Read the full transcript here