The Treasury select committee has raised its concerns regarding the changes on VAT after Brexit will affect firms in the United Kingdom.
This week, MPs are scheduled to debate on the Taxation (Cross-border Trade) Bill of the Treasury, which attempts to iron out the customs issues that are posed by Brexit.
However, Philip Hammond receives a backlash due to the bill after it emerged that over 130,000 companies will have to pay VAT upfront on imports from the European Union.
Currently, VAT is not paid on goods that are imported from the European Union until the said products have already been sold to customers, enabling companies to pay once they have already recouped the cost.
The chair of the Treasury select committee, Nicky Morgan, has said that she will write to HM Revenue and Customs to inquire about what the new rules on VAT would mean for businesses.
Vince Cable, the Liberal Democrat leader, described the bill of Hammond as “dangerous.”
“It is questionable whether Brexiteer idealogues realise the implications of this bill,” said Cable.
“Do the hard-liners understand the concept of rules of origin, the impact of a new customs checking system on suppliers or how badly British firms will be hit by having to pay VAT upfront on good imported from the EU? This is a dangerous bill.”