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Brexit News for Businesses

14/04/2021

In this article we highlight the main issues related to UK tax, VAT and imports custom duties that businesses need to be aware of as a result of Brexit.

Economic Operators Registration Identification number (EORI)

Businesses require a GB EORI number to import or export goods into Great Britain. An XI EORI number is required for imports and exports to or from Northern Ireland. This number must be quoted on the import customs declaration to ensure that any import VAT can be recovered.

Moving goods to the UK from EU member states

When moving goods between the UK and EU member states UK Import VAT will be due and a UK customs declaration must be completed. Border controls are to be phased in between 1 January 2021 and 1 July 2021 intended to reduce the compliance burden. Under the current Brexit trade agreement there should be no UK custom duties on most goods imported from the EU.

Goods supplied to the UK consumers by overseas sellers are required to be registered for UK VAT so as to pay UK VAT but no UK custom duty on those sales where the sales consignment value is less than GBP 135. If the above-mentioned goods are sold to the UK consumer via a marketplace facility then it is the marketplace that is the deemed seller and so it is the marketplace that is required to account for the UK VAT whether or not they are established in the UK.

The Postponed Import VAT Accounting (PIVA) can be used by businesses importing goods to the UK which enables the UK import Vat to be paid to HMRC via the importers UK Vat Return.

For the year 2021 movement of goods to the UK from the EU are required to be reported to HMRC on an Intrastat Return.

Moving goods from the UK to EU member states

A UK exporter supplier can treat its exports to the EU as zero-rated for UK VAT purposes. However, export declarations are required and the UK exporter will also have to check to see if an export licence and certificate are also required.

As the UK has elected to become a ‘third country’ the advantageous EU simplification rules are no longer available to UK exporters. This in turn may mean the need for the UK exporter to register for VAT in the relevant importing EU states and requiring the appointment of a VAT Representative to deal with Vat registrations in certain EU member states.

Northern Ireland (NI)

Despite the UK political rhetoric for all imports and exports of goods NI remains in effect a member of the EU. EU Vat rules therefore apply to goods imported from and exported to the EU by NI. When goods are moved across the Irish Sea to and from NI to GB they are treated as exports and imports with similar customs/Vat declarations as would apply to goods moved to and from the EU to GB and vice versa. The import and exports position as described above will remain to be the case for 4 years from 1 January 2021 under the NI Protocol to the agreement between the UK and the EU following Brexit. Under the above-mentioned Brexit agreement between the UK and the EU when approaching the 4 years deadline date of 31 December 2024 the UK are required to give NI the opportunity to vote as to whether or not NI wants the current procedure/regulations for the import and export of goods to and from the EU to continue.

HaesCooper can help you with your tax requirements – whether you are a small, medium or large business. Contact us to discuss your needs or to learn more.