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Britain pledges to ease business fears over Brexit import tax

Reuters  |  LONDON 

(Reuters) - The British pledged on Monday to ease the potential harm to more than 100,000 companies that may have to pay sales upfront on goods imported from the for the first time after

The changes included in a new taxation bill, one of many laws passing through parliament, have alarmed company bosses, who said the move would create cashflow problems and increase the cost of doing business.

"It is an issue, (for) which the and the Treasury has sympathy," Mel Stride, a junior Treasury minister, said during a debate in parliament. "It is something that we will be closely looking at."

have warned that consumers are likely to suffer higher prices and companies may have to take out or insurance backed guarantees if they are forced to pay the upfront.

Any British company that imports goods ready for sale from the can currently register with the to bring them in without paying so-called Value-Added (VAT) upfront. They register the and it is only added to the price of the product whenever it is sold to the final customer.

Unless the negotiates a deal where can remain part of the EU-VAT area, companies may have to pay the when importing goods.

Nicky Morgan, of the Treasury committee, said during the debate her committee is planning to investigate the issue.

For some businesses "finding upfront cash in order to pay for that would be a real problem," she said.

The Treasury said in a statement it recognised the cashflow benefits for companies under existing arrangements.

"The will take this into account when considering potential changes following exit and will look at options to mitigate any cash flow impacts," the statement said.

(Reporting by Andrew MacAskill; editing by Mark Heinrich)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 00:23 IST