The Taxation (Cross-Border Trade) Act 2018 ("the Act"), which was enacted in the UK on 13th September 2018, sets out a legislative  framework for customs and excise duties, import and export duties and VAT on trade in goods and services between the UK and the EU in a post-Brexit environment.

The Act is not easy to digest but its subject-matter is not easy either!

The object of the Act is essentially to align the EU with the rest of the World in its dealings with the UK as far as all the above-mentioned types of tariffs are concerned. After Brexit, therefore, and in the absence of a customs union or other special arrangements,  the UK would  trade in goods and services with the  EU and with the rest of the World on World Trade Organisation terms ( where applicable) with no distinction between EU and non-EU countries.

As a framework Act, significant delegated powers are given by the Act to Ministers to promote statutory instruments containing detailed regulations to implement the provisions of the Act.

On  VAT in particular, some of the changes from the existing legislative position are quite radical and, for instance, section 41 of the Act provides for the abolition of  the   so -called acquisition VAT on goods and the extension of import VAT so that after Brexit import VAT would  be charged on all goods imported from outside the UK. This change, however, would be matched by new postponed accounting rules for import VAT on goods imported into the UK, whether from the EU or elsewhere, so that the cash-flow disadvantage of the change in rules is mitigated.

The Act contains a number of Schedules dealing with the administration and procedures relating to the new regime and certainly  what could be described as these non-tariff barriers to trade  need to be kept as efficient as possible in order to minimise disruptions to commerce.

In late January  2019, a series of regulations was made under the Act to start filling out the details of the framework provided by the Act and it will be interesting to see how this new statutory post - Brexit tariff code is affected by on -going political developments.

Much work continues to be done in the background to make Brexit as legally  effective as possible and the Act and its regulations are an example of that. The way ahead is, however, long.