The government has recently published details of the “Great Repeal Bill”, the mechanism by which many tens of thousands of EU laws and legislation will be adapted and adopted into UK law. There are few, if any, areas of UK life which are not touched by this.
A significant percentage of the Bill will work to update laws and legislation relating to both taxation and accountancy practices. We, as one of the leading accountants in London, are monitoring the progress of this process very closely.
If we are truly honest about it, there is currently a great deal of concern about what changes will be made during this process. As there has been no official statement made on any proposed amendments it would be inappropriate to comment. From our perspective we have no reason to question the stated intention of simply altering the laws and legislation so that UK mechanisms are referred to rather than EU ones, but know that we are prepared and ready should that course change.
One of the most frequently asked questions is whether or not the Great Repeal Bill could allow our government to scrap VAT in favour of another form of taxation. The answer to this is in theory yes they could, but in practice it is unlikely to happen.
Whilst the VAT system was introduced to replace Purchase Tax primarily as a requirement of joining the European Economic Community in 1973, no longer being a member does not mean that the system has to either revert or be replaced. As it is a relatively straightforward taxation system to manage and process it has been widely adopted by nations around the world.
At present we believe it is to echo the majority when we say that there is neither an expectation nor likelihood that consideration would be given to replacing the VAT system under the Great Repeal Bill. The current system works very well, and one cannot really see any immediate advantages to making a change. As one of the leading accountants in London we will, however, be closely monitoring all changes made in terms of taxation and accounting.