Brexit and the future of UK travel – What did a recent ABTA seminar tell us?

12 February 2019

With almost uncanny timing, on Thursday 31 January, PwC hosted an ABTA seminar, at which a range of speakers (lawyers, accountants, industry and government representatives) considered the possible impact of Brexit on the UK travel industry, both inbound and outbound. When the event was booked back in November, who could have forecast the events in parliament in the days leading up to it. In fact, at one point, we wondered whether it would go ahead, anticipating that by then, the UK would have agreed an exit process and that, more than likely, we would be preparing for a transition period where very little would change at least in the immediate future.

However, while that may still be the outcome, the risk of a no-deal or different deal exit might be more likely and is certainly creeping ever closer.

So what did we learn? Well, aside from the government representatives who naturally remained neutral, the guest speakers expressed the same view – that a no-deal Brexit would be the worst possible outcome. It is also clear that, as far as the industry speakers were concerned, the long standing uncertainty on how the UK will leave and if we will have a trade agreement with the EU, is having a negative effect on people travelling.

All agreed that UK holidaymakers are pretty robust and will seek to have some sort of 2019 holiday, but outbound sales are down, as are booked inbound tourist numbers. Real concerns were also voiced on how attractive, or not, some areas of the UK would be to tourists if significantly impacted by disruption, e.g. Dover and Kent where the last major “operation stack” (lorries parked on the M20) disruption is thought to have cost the Kent economy near £40m.

In terms of other concerns previously raised by the industry, such as movement of workers, visa requirements, and the ability for UK airlines to fly into and out of Europe, it looks like some of these have eased recently as a result of discussions between the UK and the EU Member States. For instance, agreement has been reached and assurances have been given, at least for now, on avoiding the need for Visas, allowing flights to continue and, through some individual announcements, UK employees continuing to be allowed to work in some EU Member States.

However, in the midst of the serious discussions, we also learned some interesting facts that we might not have otherwise known. For instance, the Swiss hold regular people referendums, frequently revisiting issues as/when new facts come to light (so can change their minds). 12,000 lorries a day pass through the port of Dover. Brittany Ferries started operating in the same year the UK joined the EU, with the business still being owned by a conglomerate of French farmers. And a delay in triggering Article 50 could impact on MEP elections due to take place in May (so would the UK still have to put forward representatives?).

As for tax however, there is no real change and UK tour operators / travel agents should still be considering the impact and requirements of a no-deal outcome. As mentioned in one of my previous blogs, ABTA’s advice is that in the event of a no-deal Brexit, UK tour operators should prepare themselves for a requirement to register and account for VAT in each relevant EU member state. See my earlier blog on TOMS and Brexit - What could happen in the event of a no-deal outcome for more on this.

If you would like to discuss these potential issues in more detail, please do get in touch.

Damon Wright

Damon Wright | Head of Travel & Leisure, Indirect tax
Profile | Email | +44 (0)7483 365005

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