Some surprises have been unearthed in a report from Parliament’s European Scrutiny Committee on the future of VAT in the UK after Brexit. Published in accountingweb.co.uk this week, Jeremy Cape examines the report and demystifies what it means.

The European Scrutiny Committee, chaired by long-time eurosceptic Sir William Cash, published its report on VAT: EU proposals for reform and the implications of Brexit on 3 April 2018. While this report attempts to look in isolation at the EU’s proposals for the “true” single EU VAT area, Brexit intrudes at every turn.

The committee identified that in relation to VAT, Brexit presents a trade-off and urges the government to set out how it intends to balance competing pressures with respect to trade, the Irish border and how the UK will sit post-brexit in the EU VAT system.

The committee states that: “any decision by the UK to diverge from the harmonised standards that underpin the common VAT system could have unforeseen consequences, potentially rendering the whole cross-border system that allows for border controls to be waived technically unworkable”.

Jeremy examines the report in more detail here.