In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. We also update you on recent developments in relation to the Protocol on Ireland / Northern Ireland and recent meetings on EU exit. HMRC has also contacted us with an update on the replacement legislation for the VAT second-hand margin scheme for vehicles.
Recent EU exit meetings
Last week, Chartered Accountants Ireland attended the first meeting in 2023 of the UK-EU Trade and Cooperation Agreement Domestic Advisory Group (“DAG”). The UK DAG is a consultative body which aims to enable the government to hear from those most affected by the operation of the UK-EU Trade and Cooperation Agreement.
Chartered Accountants Ireland took the opportunity at the meeting to highlight our ongoing concerns that a longer term solution is needed to the intermediaries market in Northern Ireland given that the Trader Support Service is due to cease on 31 December 2023. We also raised the potential role that the DAG and its members could have in examining any proposals which may result from the ongoing Protocol negotiations and the importance of ensuring that business voices are heard as proposals develop.
The Institute also met last week with UK Government Officials, specifically the Foreign, Commonwealth & Development Office (“FCDO”), who are tasked with providing executive support to the DAG. Although the Protocol is supposedly outside the remit of the DAG’s work, the Institute did receive an update from the FCDO on the ongoing Protocol negotiations which we cover below.
Update on the Protocol
Last week, media reports began to speculate that the UK and EU have reached some sort of framework for the future trade operating model in the Protocol and specifically that the EU will accept the principle that GB goods shipped to NI and staying there should be treated differently to goods moving to Ireland into the single market.
This would effectively mean a green and red lane model at ports, as proposed by the UK, and as would appear to be contained in the Northern Ireland Protocol Bill. Chartered Accountants Ireland’s evidence submission to the House of Lords Protocol Sub-Committee discusses the proposed green and red lane operating model in more detail.
According to RTE’s Tony Connelly, these arrangements would apply to both SPS (sanitary and phytosanitary) measures and customs. There has also been speculation of some sort of concession in respect of the role of the CJEU.
No official statement by the UK or the EU has been made to confirm this speculation with the European Commission’s Vice-President Maros Šefčovič only saying that progress has been made in the talks but difficulties remain.
As set out above, last week the FCDO updated us on the protocol negotiations and confirmed that “the mood music” was more positive but no deal has been agreed as there is still work lots of work to do on all areas.
However the agreement on data sharing reached in January is viewed as being a positive step and a fundamental one in seeking to reach agreement on any future trade operating model.
The Institute reiterated to the FCDO that it will be important to involve external stakeholders to examine any proposals from a practical level.
VAT second-hand motor vehicle export refund scheme update
We previously advised that the government intended to introduce the second-hand motor vehicle export refund scheme which was originally due to be introduced from 1 October 2022.
Chartered Accountants Ireland recently wrote to HMRC seeking an update on this issue. The Government has now confirmed that the scheme will be introduced on 1 May 2023. The scheme, which will now be called the second-hand motor vehicle payment scheme, will allow businesses to claim a VAT-related payment if they buy a second-hand vehicle in Great Britain (England, Scotland and Wales) and move it to Northern Ireland for resale. HMRC is in the process of developing the associate guidance for the scheme and is working with stakeholders to do so through its Joint VAT Consultative Committee of which we are a member.
Miscellaneous updated guidance etc.
The latest guidance updates, and publications relevant to EU exit are as follows:-