New report: True economic cost of cross-border tax complexity revealed

Nearly a year after the introduction of a wave of EU VAT reforms, our latest research shines a spotlight on an economic deficit of £47.6bn in 2021.

Alongside our research partner, The Centre of Economics and Business Research (Cebr), in a survey of 250 business decision-makers from UK organisations that export to the EU, we’ve assessed the real impact of EU cross-border tax on UK exporters.

As global tax specialists, understanding our customer pinch points is crucial to helping alleviate them. In a year where we’ve seen an incredible rate of change across the sector, the Cebr report findings show that navigating the complexity of compliance and the administration of being compliant is causing a significant loss of revenue.

Compliance complexity has stifled business growth

Perhaps to no surprise, exporters find dealing with taxes stressful. This report has unveiled the extent to which perceived barriers to compliance has affected revenue:

• There is an estimated overall loss in revenue for UK exporters to the EU of £47.6 billion due to cross-border tax complexities in 2021. The biggest loss was recognised in the manufacturing sector, with £24.4 billion of missed revenue.
• Time spent on tax administrative tasks damages productivity, we estimate that this caused a loss of £386 million in gross-value added (GVA) overall. Out of this, £53 million is considered to be lost due to time spent on understanding and implementing the new EU VAT schemes.
• 3 in 5 UK exporters have reversed plans to sell in some European countries over the fear of fines and compliance issues

While these numbers are startling, there is sun on the horizon.

Effective compliance unlocks business benefits

Despite these startling figures, for those who have implemented EU VAT reforms, businesses have reported an increase in positive customer feedback. Since registering for the Import One-Stop Shop (IOSS) a whopping 94% believe their scores have increased with buyers recognising the lack of extra costs, and faster delivery of products.

Additionally, 72% of respondents are planning to expand into another EU market; a significantly higher proportion than the 32% who are planning to exit from current ones.

Whenever a new tax policy is being introduced, exporters need to spend time implementing new schemes. Businesses fear legal consequences and fines if they make a mistake, have a hard time understanding complex terms, and lose a significant amount of time that could have been invested elsewhere. In this report, we’ll give you access to exclusive data and ways in which you can navigate compliance so you can focus on growth.

Download The CEBR Report: The cost of cross-border complexity now, to access the research and find out more about how you can overcome compliance challenges to unlock cross-border growth.