Our aim is to provide you with simple, easy to read information on the changes you may need to make to your procedures after 29 March 2019.
Whichever side of the Brexit debate you favour, on one matter we can probably agree, that we are unlikely to make the journey without encountering a few potholes along the way.
The comments are based on a no-deal, worst case scenario. In our opinion, it’s always best to be prepared.
Considerations for EU Trade
As the free movement of goods would stop after the deadline, exports to and imports from the EU will need to be on the same basis as present pre-Brexit trade with the rest of the world.
Short Term Disruption
As there may be initial disruptions at the EU/UK borders whilst the unaccustomed clearance procedures are accommodated, you should discuss these likely delays with customers and suppliers.
You will need to:
- Register for a UK Economic Operator (EORI) number.
- Change contracts and terms and conditions of service to comply with International Terms and Conditions of Service (INCOTERMS).
- Submit export/import declarations. This can be done inhouse or by engaging a customs broker. Either option will involve additional costs.
- Decide on classification and value of goods for the customs declaration.
- On exports: pay customs duty and import VAT required by the destination country.
- On import: pay any customs duty and import VAT to HMRC.
- It may also be necessary to apply for an export license.
Consider Applying for Authorised Economic Operator (AEO) Status
AEO status will smooth the clearance and progress of consignments through customs checks. Whatever the outcome of present and future negotiations, this would be a worthwhile add-on to your strategies to minimise disruption to your export activities.
VAT on Exports
- Sales of goods to EU member state businesses will continue to be zero rated.
- UK businesses exporting to the EU will need to keep supporting export documentation to qualify the zero rating of supply.
- Current EU rules would dictate that when goods arrived in the EU from the UK: import VAT and customs duties would be applied.
- UK businesses will continue to be required to register for VAT in the EU member states where sales are made.
UK businesses can continue to claim refunds of VAT from member states but will need to use processes for non-EU businesses.
VAT on Imports
- Businesses importing goods from the EU after 29 March 2019, will be charged import VAT by HMRC.
- Postponement accounting for this import VAT will be introduced such that any import VAT is paid as part of the appropriate VAT return rather than when the goods are imported.
- Goods entering the UK by parcel post after Brexit will trigger a UK VAT charge on entry unless the supply is zero rated in the sender’s tax jurisdiction.
- EU exporters to the UK will be able to register with HMRC and pay any VAT charge direct to HMRC. This will only apply to parcels with a value not exceeding £135.
- VAT on goods imported with a value in excess of £135 will be collected direct from the UK importer.
- Import VAT will be payable on vehicles you bring into the UK after Brexit subject to available reliefs.
Delaying the impact of import VAT and customs duties
Consider the use of:
- Customs warehousing,
- Inward processing of goods,
- Temporary admission, and
- Authorised use.
Buyers will need to pay any duties and VAT when goods are released into general circulation.
Impact on Individuals
There are many factors that you may wish to take into account. Including…
- Driving licences. You may have to apply for an international driving permit for visits and taking a local driving test if taking up residence.
- Roaming charges may be reintroduced for mobile phone usage.
- Travel to Ireland is currently passport free, the impact of Brexit is still unclear.