BREXIT Round-up: Residency application backlog at home office

The issue of what the legal status of European citizens residing in the UK will be after Brexit has been a contentious issue since the referendum result was announced.

Kier Stramer, shadow Brexit secretary, said this week that the government should pass legislation to secure the rights of up to 3 million EU citizens currently living in the UK.

Here's a round-up on the top Brexit-related stories this week.

Home office residency backlog

The home office's official backlog of EU citizens applying for UK residency has tripled since the summer of 2015.

The number of outstanding applications "currently in progress" was 37,618 in June 2015but had risen to around 100,000 in July 2016.

Davis suggests UK could pay for access to single market

Paying for access to the single market might be an option for the UK after the government invokes article 50, David Davis has told MPs.

During questions in the House of Commons, the secretary of state for exiting the European Union, was asked if the government had considered making a contribution for access.

Davis said:

"The major criterion here is that we get the best possible access for goods and services to the European market."

Carney warns of damage to EU economies

The governor of the Bank of England, Mark Carney, has warned that European economies could feel negative consequences if their access to the City of London is disrupted after Brexit.

In an assessment of risks to the financial markets, Carney said:

"The UK is effectively the investment banker for Europe. More than half the equity and debt raised (for European governments and business) is raised in the UK, quite often from investors based in the United Kingdom."

EU commission proposes new VAT rules

A number of measures have been proposed by the European Commission (EC) to improve VAT for e-commerce businesses in the EU.

The consultation proposes that VAT transactions are completed in the member state of the final consumer, resulting in fairer tax distribution among EU countries.

The ‘One Stop Shop’ portal for online payments will also reduce VAT compliance expenses, potentially saving businesses across the EU €2.3 billion a year.

It is estimated that, if no action is taken, lost VAT revenue could reach €7 billion by 2020.

The measures being introduced include:

• allowing companies to deal all their EU VAT obligations when selling goods online in 1 place
• simplifying VAT rules for start-ups and micro businesses
• handling VAT on cross-border sales under €10,000 domestically
• action against VAT fraud outside the EU
• reducing VAT rates for e-publications such as e-books and online newspapers.

Pierre Moscovici, commissioner for economic affairs, taxation and the customs union, said:

“Companies big and small that sell abroad online will now deal with VAT in the same way as they would for sales in their own countries. That means less time wasted, less red tape and fewer costs.

“We're also simplifying rules for micro-businesses and startups, allowing them to tap new markets more easily.”