The government has published a series of 106 technical notices setting out information that allows businesses to understand what they would need to do in a no deal scenario so they can make informed plans and mitigate risk.

If there’s a no deal

The UK will continue to have a VAT system after it leaves the EU. The VAT rules relating to UK domestic transactions will continue to apply to businesses as they do now. If the UK leaves the EU without a deal, the government’s aim will be to keep VAT procedures as close as possible to what they are now. This will provide continuity and certainty for businesses. However, if the UK leaves the EU with no agreement, then there will be some specific changes to the VAT rules and procedures that apply to transactions between the UK and EU member states.

Accounting for import VAT on goods imported into the UK

If the UK leaves the EU without an agreement, the government will introduce postponed accounting for import VAT on goods brought into the UK. This means that UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, rather than paying import VAT on or soon after the time that the goods arrive at the UK border. This will apply both to imports from the EU and non-EU countries.

For more information visit the government website

Last week IATA released their May 2019 Air Freight Analysis report, stating in seasonal adjusted terms the level of freight tonne kilometres (FTK’s) ticked up modestly for the third consecutive month, suggesting we may be past the low point of this cycle, although the recovery remains tentative at this stage.

The weakness in freight volumes compared with a year ago remains broad-based. As was the case in April, Africa and Latin America contributed positively to industry-wide- on-year- FTK growth result.

From the recent G20 talks it appears that US-China trade relations have thawed somewhat and negotiations will recommence shortly.

This follows the end-June announcement of President Trump cancelling the planned 25% tariff on an additional $300bn worth of Chinese goods.

Airlines have responded to the period of weakness in freight demand partly through reducing capacity in the market. Growth in available freight tonne kilometres (AFTK’s) slowed to just 1.3% in May 2019 compared to May 2018.

While this represents a relatively modest increase, the growth of supply is still around 5 percent points higher than that of demand growth. Consequently, the industry-wide freight load factor maintained the downward trend seen in the last 13 months, and is currently a substantial 2.3% points below its level a year ago.

Asia Pacific & Middle East

Amidst the implementation of a new round of tariffs on US-China trade in mid-May, international FTK’s flown by airlines based in Asia Pacific fell by around 7% year-on-year in May, after a revised 11% decrease in April.

The effect of the US-China trade war has clearly had an impact on the regional growth in Asia Pacific. This is despite evidence suggesting that production lines had shifted within the region to try to counter the adverse effects of the rising trade tensions between China and the US.

North America

North America has seen the weakest outcome since early 2016, with international freight volumes deteriorate by 3.2% year-on-year.

Latin America

After three consecutive months of international freight growth, Latin America returned to negative year-on-year growth in May. International FTK’s are currently 0.5% below their level of May 2018.

Europe

International FTK’s for the European carrier are currently unchanged from their year –ago level. This represents a substantial improvement from an annual decline of 6.7% last month.

Africa

Airlines in the smaller Africa international market posted a swift 8.3% growth compared to the same period last year, making Africa the strongest performer on that measure for the 3rd consecutive month.