Fiscal representative to become mandatory for UK established companies in Belgium

As part of the VAT consequences of the departure of the UK from the EU, Belgian VAT authorities have officially communicated to business their position as to the need for UK established companies, that currently are VAT registered in Belgium via a direct VAT registration, to appoint an individual fiscal representative as a result of Brexit.

The letter of the Belgian VAT authorities confirms that UK established taxable persons will have to fulfil the VAT obligations which are imposed on all VAT taxable persons who are not established in the EU. The most significant VAT obligation is the requirement to appoint an individual fiscal representative for VAT in Belgium.

Because of the general nature of this obligation, UK established companies will no longer be able to operate a direct VAT registration as from the date Brexit will be effective, in principle 30 March 2019.

To discuss this, please feel free to get in touch with Peter Empsten (details below) and ensure your business meets this new administrative formality. Peter will also be able to share a letter from the Belgian VAT authorities outlining the change.

Peter Empsten – Head of Indirect Tax

Crowe VAT Representation 

E-MAIL : peter.empsten@crowe.be

Will robots steal your job? A report on the British School of Brussels Expert Panel

Although those headlines that tell you robots are going to steal your job can be disheartening, the overarching message that came from last week’s panel was a positive one. Though the term Artificial Intelligence may seem scary, the panel reminded us that we actually already use A.I everyday – when we search Google, choose from recommendations on Netflix or Spotify or find more similar products on Amazon. Overall, the discussion made it clear that as automation advances, it will be the most human-centric skills that become the most valuable.

On the 12^th February, our Chief Executive Glenn Vaughan chaired an expert panel discussion on automation at The British School of Brussels, in collaboration with AmCham Belgium. Discussing the ‘Jobs Lost, Jobs Gained: workforce transitions in an age of automation’ McKinsey Global Institute report from 2017, the panel provided a great insight for the future workfoce – the students from BSB and other local schools – as well as the current one – parents and corporate representatives from across Brussels.

Key note speaker Jacques Bughin, Director of MGI and co-author of the report, gave the message that instead of fearing this new technology and worrying about what jobs it might take away, it is better to view these new advancements as opportunities and seize each one. Jacques’ confidence that it is not that today’s jobs will all disappear, that instead they will transition as they have done in the past and it is up to us to decide how these transitions unfold, was an aspirational takeaway for the audience.

Catherine Stewart, Senior Advisor at Interel Group, was clear that there are still ways to stay ahead of the automation trend. Though machines and A.I are advancing in cognitive tasks related to memory and learning new information, they lack our people skills and emotional intelligence. Catherine’s advice to the future workforce, and also to the current one, is “learn to be clear, constructive, creative and adaptable, learn to listen and to challenge in a positive way” in order to thrive.

‘The high-skill, high-pay jobs of the future may involve skills better measured by EQs (a measure of emotional intelligence) than IQs’

Andy Haldane, Chief Economist at the Bank of England

Angela Dong, Senior Vice President Human Resources, Research & Innovation, Solvay, is witnessing the A.I transition first hand, and advised the audience that in fact, not everyone needs to master the potentials from A.I and new technology, but to stand out you will need to understand what it is that it can help you achieve.

Melanie Warnes, Principal and CEO of The British School of Brussels, concluded the panel discussion in agreement with the other panellists that the way the future workforce interact with each other, human to human, will be crucial, and that an optimistic view on the topic remains important.

Though automation may be on the rise, the take home message of the night was to take a positive outlook – the robots won’t beat us yet!

‘The future is not predictable, it is to be shaped’

Jacques Bughin

 

 

The Tax, Finance and Legal task force needs your participation!

One of the British Chamber’s task forces is the Tax, Finance and Legal (TFL) task force. Its members include representatives of large to medium size accounting and tax firms, law firms, and some of the largest banks.

The Tax, Finance and Legal task force delivers regular seminars on practical tax, financial, economic and legal issues and updates for (international) businesses operating in Belgium.  These seminars offer British Chamber members the opportunity to showcase their expertise to a wide network of business professionals. Seminars hosted in 2018 included:

 

• Politics and economics collide: Looming crisis or myth? – An informative presentation outlining how political developments such as Trump’s policies and Brexit will impact business operations and opportunities in Belgium, UK and broadly in Europe.
• Masterclass in cross-border estate planning – At this event we heard how to plan your estate like an expert, and how you can save on Belgian and overseas inheritance tax.
• Are you or your employees working in different countries? Here is what you need to know – For anyone who frequently operates in multiple countries, or manages employees who do so, this seminar gave advice on the best solutions for any tax, social security and labour law issues they might face

 

 

 

 

 

The Tax, Finance & Legal task force also oversees the chamber’s annual Expat Financial Affairs conference, allowing expats to listen to informative presentations on investments, pensions, self-employment and estate planning, and mingle with fellow expats over food and drinks.

Although of course Brexit and facilitating business with the UK are an important part of our agenda, the TFL activities are still aimed at a much larger group of international companies and expats in Belgium.

Since we want to focus on topics that are of interest to our members, please let the TFL task force know about any tax, finance or legal topic you would like to see covered. Or if you would like to get actively involved in an event, please propose topics you would be interested in driving by contacting the team

 

We look forward to hearing from you.

 

Marc Verbeek, Tax Partner, Crowe Spark & Chair, Tax, Finance and Legal Task Force

Preparing for Brexit

Preparing for Brexit 

It is less than 5 months until Brexit and the Article 50 deadline on 29 March 2019, and whilst rumours abound of deals, unfortunately – from a business perspective – the spectre of a non-orderly withdrawal outcome remains fully in view. With a few exceptions, it is a wide and deep business consensus that such a no-deal outcome would be an extremely disruptive negative outcome for economic operators on both sides of the Channel. It’s worth repeating – from a business perspective – no deal is the worst deal for everyone.

If there is no withdrawal deal, one might hope there will be side deals covering key issues such as aviation or data, but this cannot be guaranteed, particularly if negotiations break down badly. Consequences will be unpredictable, both politically and economically.

Irrespective of that, we can expect significant disruption at all UK/EU borders – notably with France, Belgium, the Netherlands and in main airports. This is a simple function of the UK leaving the Customs Union and the Single Market without a ready replacement legal framework and with the systems developed to take over.

The situation of the Irish Border in the case of no deal is also unclear – both sides have committed to no ‘hard border’, though both sides may have legal obligations under both EU law in the case of Ireland, and under the WTO in the case of the UK to undertake customs and regulatory checks. Once the UK has left the EU Customs Union and Single Market, there will have to be checks and formalities for goods, the only question is where these checks will take place and exactly what formalities will be applicable.

Preparedness notices from both the EU and the UK Government have flagged the respective legal provisions at the moment of the UK leaving the EU, but do not give a clear roadmap for affected businesses in the case of a collapse of the withdrawal negotiations or a non-ratification by the respective parliaments.

At a minimum, companies should be looking at the potential impact on their supply chains of a potential raising of regulatory and customs barriers, possible queues on both sides of the border as new systems and formalities are introduced, as well as the possible restriction of freedom of movement for staff. On a sector by sector basis, the cessation of regulatory arrangement and licensing may also create new barriers to market.

The British Chamber of Commerce | EU & Belgium will stay close to the UK Government, the EU institutions and the Belgian Authorities during this challenging period. We are the go to organisation that authorities are asking for feedback from on business concerns. Get in touch, use our platform and share your concerns, specific or otherwise so that we can get them to the right people.

Matt Hinde, Fleishman Hillard, and Morten Petersen, EPPA, Co-Chairs of the Future Relations Committee

If you have more questions about the prospect of a no deal Brexit, you can find more information on our website page – What to do if there is no deal?

Our next Brexit event – Brexit and Future Relations – An Update on the Irish Perspective – will take place on the 20th November. You can find more information on our website.

 

 

Making Tax Digital: changes to UK VAT compliance

This blog post was written by Marc Verbeek.

Marc Verbeek is a Tax Partner currently working for Crowe Horwath Vanhuynegem Associates in Belgium, prior to this he worked at the Belgian Ministry of Finance, before moving on to spend 26 years with BDO. Marc is a certified tax consultant. His expertise includes (international) corporate tax advice, international employment tax, corporate tax compliance, rulings and litigation.

One of the biggest changes to the way UK companies interact with HMRC, the UK tax authority, is coming into effect from 1 April 2019. Making Tax Digital (MTD) is HMRC’s initiative to bring technology and tax together, allowing HMRC to become a “world leading, digital tax authority.”

What does it mean?
The changes will mean that all UK VAT registered organisations with a turnover above the UK VAT registration threshold (£85.000) will have to:
• keep, and be able to provide, their UK VAT records digitally.
• submit their UK VAT data to HMRC through compatible software, not through the HMRC online portal.
HMRC will no longer allow UK VAT return figures to be manually entered in the HMRC online portal when submitting the UK VAT return. Instead, you will need to have software capable of doing this for you.

Will I be affected?
Any business registered for UK VAT as their turnover has exceeded the UK VAT registration threshold will be affected. Of those, some already have a digital mechanism to transpose the figures from the UK VAT return workings to a submission, however the majority do not. According to figures from the Chartered Institute of Taxation, the leading professional body in the UK for tax advisers, 87% of UK VAT taxable persons will have to take action as a result of the new rules. The only exemptions will be for religious reasons or in the event of insolvency procedures.

What about international businesses?
Of particular interest to Belgian businesses will be that almost everyone who is UK VAT registered will have to comply with the MTD rules; being established overseas or submitting UK VAT returns outside of the UK will not result in an exemption from MTD requirements.
In addition, it may be a greater challenge to overseas organisations to comply with MTD for UK VAT as their UK activities are likely to be a single part of a larger international activity. This could also be the case for UK organisations who are part of international groups required by their overseas head offices to operate specific accounting or reporting processes and software.
As a result, if your organisation is currently manually entering the UK VAT return figures on HMRC’s portal, MTD will present a significant change to your current UK VAT processes.

What are the main requirements?
HMRC’s intention is that software will be used to maintain the relevant digital records, calculate the UK VAT return figures and to submit the return electronically. This is to be done using functional compatible software.
This software should also act as a digital ‘bridge’ between the UK taxpayer and HMRC’s systems. It will no longer be acceptable for an organisation to manually transpose figures when submitting their UK VAT returns.

When does this take effect?
HMRC has indicated there will be a “soft landing” period between April 2019 and April 2020 without application of financial penalties for record-keeping failures. This is to assist organisations by allowing extra time to update their systems to be fully compliant. There will however, have to be a digital link from the outset between the spreadsheet and the linking software that submits the UK VAT return digitally.
MTD as it currently stands is likely to just be the start of the road; it is intended to be introduced for UK Income Taxes in April 2020 and it is not unreasonable to expect that the scope of what information and data is available electronically for HMRC to access remotely will only get broader. As a result, even with a soft landing period, companies need to proactively take steps to ensure they remain compliant.

What software should I use?
HMRC has stated that it will not be providing software for organisations to use, and currently they have not yet informed taxpayers as to commercial software suppliers who will be providing the “functional compatible software”. Commercial software providers are developing solutions and some organisations will have sufficient in-house IT capability to build their own.
“Functional compatible software” is a software program or set of compatible software programs that must be able to:
• record and preserve electronic records in an electronic form for up to six years
• create a UK VAT return from the digital records
• provide to HMRC information and returns from the electronic records in an electronic form and by using an Application Programme Interface (API) to link to HMRC’s systems
• receive information from HMRC.
There “must be a digital link” between all software used by the organisation for its UK VAT compliance. Examples are given in HMRC’s guidance and a very common one, likely to be familiar to a large number of organisations, is the situation where to prepare the UK VAT return the taxpayer:
– maintains its sales and purchases data in an accounting system
– downloads this data into a spreadsheet for manual manipulation
– manually enters the figures into HMRC’s website for submission.
Under the new rules, the links between the two software programs (accounting system and spreadsheet software) must be digital.

What now?
Although the implementation date is in 2019, like all technology projects, there is a lead time in making the necessary changes to be able to successfully implement the measures needed to comply with the new rules.

Organisations affected by MTD need to consider a strategy for the immediate requirements to be ready for the April 2019 launch date and also give thought as to whether these preparations should include a readiness for a likely future expansion of the MTD requirements, be it for additional UK VAT data or for other UK taxes such as Income Tax.

COBCOE Report

COBCOE recently released a new report titled “Review of European business views
on the Transition Period” which comprised of business input from businesses in the UK and across the EU. Some of the input came from our Brexit Ambition Roundtable February 2018 event held at the chamber. This report was shared with government official and is aimed to influence current negotiations between the UK and EU.

 

To view the full report click here.

Brussels Moves!

Brussels Moves!

Help shape the future of the city and have your say on transport, air pollution and voting rights for foreigners. Ahead of The Bulletin’s debate on 26 April, we’d like to hear your opinions on how to make our city a better place. Fill in our quick survey here.

The Bulletin invites you to the free event, followed by networking and a free drink.
When: Thursday 26 April, 19.00-21.30
Where: KBC Group, Avenue du Port 2, 1080 Brussels (metro Yser)
Book your place here now!

Reaction to European Council (Art. 50) guidelines on the framework for the future EU-UK relationship – 23rd March

 

The British Chamber welcomes the EU and UK transitional agreement allowing additional time for a deep and comprehensive future relationship agreement to be negotiated. We also, welcome the UK and EU’s joint intention to achieve a post-transition relationship that satisfies the mutual interests flourishing between them.

We ask:

• the European Council to deliver a negotiation mandate which enables the broadest and deepest possible relationship between the UK and EU to be agreed,

• the UK to present, without delay, its written proposals for a deep and comprehensive future relationship with the EU27 as soon as possible, and that this proposal contain sufficient details on how trade between the UK and EU in each business sector will function, so that EU and UK business have enough time to understand how it will need to adapt and minimise disruption to customers, supply-chains and the workforce.

Golden Bridge Awards: Catch up with our winners

This year once again saw a host of brilliant companies as finalists in the Golden Bridge Trade & Investment Awards at the British Residence in Brussels. The evening celebrated the ever growing UK-Belux trade, with all our finalists showing initiative and success to make the UK-Belux relationship even stronger. The three 2017 winners, ALE, Les Carrières de la Pierre Bleue Belge and Renson have taken the time to tell us about their success as a Golden Bridge Trade & Investment Awards Winner.

Golden Bridge Award for Best Innovation in Export for a UK company

“When we filled out the application form we were not sure what to expect and throughout the process we were questioning how well we would do. Our client was convinced of the added value we could bring to the project in Zeebrugge, Belgium, but, was wondering whether others, not necessarily from our industry, felt the same way.

After being shortlisted we had the opportunity to present to the judging panel. This was a great experience, as we only had limited time the elaborate how the project had become reality. Starting with a simple request from our client we began adding additional scope and grew it to a solution we could not have imagined at the beginning.

ALE created a joint venture with two Belgian companies, ICO and Iemants. This joint venture combined its services to deliver an integrated solution that truly crossed bridges and led to success similar to what we have done, again, for the Golden Bridge Awards: The British and Belgians working together.

Winning the Golden Bridge Award for Best Innovation in Export is a wonderful achievement and a true dedication to the entire project team that worked on the project executed in Zeebrugge.”, said Yannick Sel, Sales Director.

Best Small and Medium Sized Enterprise

“We are delighted that our partnership with quarry Pierre Bleue Belge has won the 21^st Golden Bridge Award for Best Small and Medium Sized Enterprise, celebrating the export success of the world famous Belgian blue limestone (Bluestone) to the UK.

The award acknowledges the consistent growth Pierre Bleue Belges exports to the UK, currently they export 28% of turnover with 5% going to the UK. The judges were particularly impressed with the ethically secure supply chain, in compliance with the Modern Slavery Act and environmental factors as the quarry is less than 200 miles from London.”, said Alan Gayle, Director.

Golden Bridge Award for Belgian company

“Winning the Golden Bridge Trade & Investment Award was a huge honour, Renson’s UK Sales Director Bill Hayward says: “It supports Renson’s choice to expand into international markets, specifically in the UK. Renson invests heavily in innovation, communication and internationalisation, always with the focus on a healthy and comfortable indoor environment. The company entered the UK market over 20 years ago understanding the importance of the UK market to its growth. Winning the Golden Bridge Trade & Investment award proves that Renson’s belief in a strong relationship between Belgium and the UK is absolutely key to the success and growth of us as a group. At the same time, it reinforces our pride in our Belgian roots and emphasises our will to support local initiatives whilst respecting our company DNA. Having a local factory in the UK helps us to respond to local needs in a fast, efficient manner, being awarded for this cross border relationship takes our mark to a higher level both in the UK – where Renson can continue to build market share and leading innovation from the front, as we are proud to do in Belgium.”

The 2017 winners’ testimonials clearly show the value that the Golden Bridge Trade & Investment Awards initiative has for winning companies. Once again we congratulate this year’s Golden Bridge Trade & Investment Award winners and look forward to following their journeys.

The application process will soon open for our next Golden Bridge Trade & Investment Awards, which will be held in London.

For more information on the Golden Bridge Awards opportunities and how you can get involved, contact Alexandra.

Employment opportunities: British Black youth and the ‘ethnic penalty’

The persisting ‘ethnic penalty’ encountered by British black and ethnic minority within the employment market has been reported by a plethora of bodies, namely British parliamentary committees (i.e., Department for Work and Pensions), the Equality and Human Rights Commission, leading think thanks (i.e., the Runneymede Trust), trade unions (i.e., Trade Union Council) and so forth. The ‘ethnic penalty’ concerns the barriers to opportunities and discrimination experienced by groups of people due to their race and ethnicity.

Within this context of barriers to black and ethnic minorities and employment opportunities there is the question of the plight of British black and ethnic minority young people. According to a recent report by the UK’s Parliamentary Work and Pensions Committee (1), “There are stark differences in youth unemployment by ethnic group. In the year to June 2016, the unemployment rate among 16-24 year olds was 30% for black people, 26% for people from Bangladeshi or Pakistani ethnic background, and 13% for white people. While unemployment rates fall substantially with age for all ethnicities, the relative positions of the groups largely persist (2017, 11).”

 

Moreover, within this demographic is the ‘silent catastrophe’ or ‘moral panic’ concerning young black men, particularly of African and Caribbean background. Young black men have higher unemployment rates than all other groups of young people. The discrepancy between unemployment rates for young black men and white men has widened in recent decades. Essentially, young black men experience higher rates of unemployment notwithstanding their favourable educational attainment and regardless of their level of qualification. Moreover, black university graduates are twice as likely to be unemployed as white graduate (2).

The implications of this lamentable waste of “human capital” for the individual, families, communities and society is cataclysmic. In order to address the situation of Britain’s black youth unemployment urgent transformative measures are required which include:

• Robust data and knowledge gathering on how the intersecting aspects of ‘race’, social class, affects young black people access to employment opportunities.
• Government intervention which requires all employers and occupational training providers to set targets for the recruitment of vulnerable groups. Notwithstanding that all minority groups are affected by the ‘ethnic penalty’ in some form but for black young people starting out in life it is a major impediment. Thus, it is crucial that the government set the conditions for the necessary change.
• The need for effective penalties for employers found to be discriminating against black applicants.
• The need to give greater incentives to employers to recruit, retain and progress young black people’s careers.
• Monitoring youth programmes and apprenticeship schemes for their achievement and success in obtaining black young people’s participation and permanent job offered on completion.
• Promoting vocational educational pathways for young people – particularly careers advice and pursuing parity of esteem between vocational and academic qualifications.
• Setting priorities for youth training and employment: vocational qualifications and developing a diverse workforce.

 

There is a key role for employers to play in reducing the ‘ethnic penalty’ and they could begin this process by examining their recruitment procedures.

 

References:

1. House of Commons Work and Pensions Committee, Employment opportunities for young people 2017, Ninth Report of Session 2016-7. Published on 29th March 2017.
2. Wright, C; Standen, P; Patel, T. (2010), Black Youth Matters: Transitions from School to Success, London and New York: Routledge.

 

Professor Cecile Wright, School of Sociology and Social Policy, University of Nottingham UK, Highfield House, University, University Park, Nottingham NG7 2RD. UK