Updated: Jan 5
The UK formally exited from the EU on 31st December 2020.
UK businesses will need to take action now to ensure that there is none or very little disruption felt.
Our clients will be effected on areas such as imports, exports, VAT, customer base, supply chain and the workforce.
VAT registered businesses that are Importers or exporters will have to make sure they have a UK economic operator registration and identification (EORI) number. Then decide how they will make customs declarations, and checking if their imported goods are eligible for staged import controls.
Most businesses with a good compliance record will be able to defer import declarations on most goods for up to six months after 1 January 2021. Use this link to obtain an EORI number: https://www.gov.uk/eori
Postponed VAT Accounting
From 1 January 2021, businesses will be able to use 'Postponed VAT Accounting' to account for import VAT on their VAT return for goods imported from anywhere in the world. The VAT on goods imported will be paid on your usual VAT return, rather than having to pay it upfront and recover it later. Typically a Freight agent (e.g. UPS) will give HMRC the buyer's GB VAT number and EORI number. This allows the goods to come into the UK without VAT being paid. You as the buyer, will account for this import VAT by declaring it on your next VAT return. (Box 1 Output and also Box 4 Input so there is no cashflow impact. You also include the Net value in box 7). The VAT will be applied to the good value plus carriage costs.
Import VAT will not be due at the border if goods in a consignment do not exceed £135 in value. The only exceptions will be excise goods and gifts.
Register for CDS
An importer is not required to use Postponed VAT Accounting, but it makes sense from a cashflow perspective. The importer will need to see their monthly import VAT statements in order to make accurate VAT returns.
The import statements can only be accessed if the importer is registered for the Customs Declaration Service (CDS). If you use postponed accounting, in order to make accurate VAT returns, the business must view the information in their CDS account.
To access the CDS the business must have a GB EORI number. If you do not have an EORI number, you can apply or one. The EORI number is issued instantly once the application is submitted.
If you do not have access to the CDS already, you should register ASAP.
There will be new rates of customs duty for imports - called the UK global tariff.
If you are an importer, please use this link for further help:
If you exports goods to the EU from the UK, please use this link for further help:
3rd Party Companies
If you need to appoint a freight forwarding company or a fast parcel operator to handle your import or export declarations you can find a list of businesses that can help here:
Please act now to continue trading with Europe.