TMO & Brexit - Part 02

TMO and BEXIT – Part 02 follows on from our webinar in December, where we examined the position and situation surrounding the Terminal Markets Order (TMO), the MOU between HMRC and both LBMA and LPPM, and an update on BREXIT post-Transition planning. Today we focused on the future to hear how the UK Government will be supporting “business as usual” in the London Market and the opportunities to enhance the mechanisms that allow the Market to function.

Ed Blight explained the impact of the Trade Deal between the UK and the EU, and defined how the Market can engage in the near, mid and longer-term to develop the MOU to meet the needs of the Market now and in the future.

Rachel Stirrat gave the UK Governments position on the TMO judgement passed by the CJEU and how they are engaging with the European Commission. She confirmed that there will not be any impact upon Market participants, and that UK law remains unchanged. Rachel touched on the Industry Working Group that will be looking at VAT in the Financial Services Market and the impact of the Trade Deal between the UK and the EU. In summary the UK Government position is unchanged and is looking to positively engage with Industry and the Market as it defines its Financial Services governance structure, approach and mechanisms into the future.

Andrew Tucker summarised the importance of the continuation of the TMO and the MOU between HMRC and the LBMA and LPPM. He made it clear that HMRC are willing to engage with the Market to address “quick wins” to improve and align the MOU to meet the immediate concerns of Market participants, and to support consistent application of the interpretations. He also cautioned against wholesale changes too early – stressing the need to consult, analyse and define the longer-term strategy. Andrew also took the opportunity to clarify the situation surrounding the recovery of import VAT, and Agency status covered under the HMRC notes RCB 2 (2019) and RCB 15 (2020). In short, HMRC are keen to engage with the Market to identify what can be done in the short-term to tune the MOU but that the priority must be to define the longer-term requirement that will be drawn from consultation with the Market and from the Industry Working Group on VAT in the Financial Services Market.

14 January 2021