Changes to Imports and Exports with the EU from 1st January 2021

From 1st January 2021, Great Britain will leave the single market of the EU which will impact VAT, Customs and Duties on imports and exports with the EU. Below is a summary of the changes coming into force.

VAT on Importing goods from the EU

From 1 January 2021, you’ll be able to account for import VAT on your VAT Return for goods imported from anywhere in the world.  This means you’ll declare and recover import VAT on the same VAT Return, rather than having to pay it upfront and recover it later, this is known as Postponed VAT Accounting.

You do not need to be authorised to account for import VAT on your VAT Return and can start doing so from 1 January 2021, if:

  • the goods you import are for use in your business
  • you include your EORI number, which starts ‘GB’ on your customs declaration
  • you include your VAT registration number on your customs declaration, where needed

Therefore, you need do nothing to prepare so long as you have an EORI number.

VAT on Exporting goods to the EU

From 1 January 2021, you can charge customers VAT at 0% (known as ‘zero rate’) on most goods you export to the EU. You must meet certain conditions before you can zero rate the supply of goods for export which are as follows: –

  • You must hold evidence (either commercial or official) to prove entitlement to zero rating
  • The goods must be physically exported from the UK within certain time limits (usually 3 months but extended to 6 months in certain situations)
  • You must obtain evidence of export to support the zero rating within time limits (usually 3 months but extended to 6 months in certain situations)

Customs and Excise declarations when Importing & Exporting goods 

From 1 January 2021, you’ll need to make customs declarations when you import or export goods with the EU.   These are the same as those currently in place for importing goods from the rest of the world.

You can make the declarations yourself or by using a courier, freight forwarder or customs agent.

Importing

Most declarations are submitted electronically through Customs Handling of Import and Export Freight (CHIEF) system, you would then, usually, need to submit a full declaration at the time the goods enter the UK.

Exporting

Most declarations are submitted electronically using the National Export System, for most goods you’ll then make a full declaration which must be made before the goods arrive at the port of export.

Importing & Exporting

For both imports and exports, you may also be able to apply to use Customs Freight Simplified Procedures (CFPS) which is a streamlined process for clearing imported and exported goods.  Under CFPS the Simplified Declaration Procedure (SDP) allows you to enter goods to a customs procedure without the need to provide a full customs declaration at the point of release.

The first part of this declaration is called ‘pre-shipment advice’ where you submit basic details of your import/export to customs.  In most cases, you submit this electronically to the Customs Handling of Import and Export Freight (CHIEF) system.

You will then need to give customs more information, but you send it later in a supplementary declaration.

Summary

If you decide that you want to submit declarations for importing and exporting goods with the EEU you will need to do the following, if you have not already done so:

  • Apply for access to CHIEF
  • Purchase third party software that can submit declarations through CHIEF
  • Register for the National Export System
  • Possibly purchase third party software that can submit declarations through the National Export System
  • Apply for Simplified Declarations using form C&E48

Completing a customs declaration can be a complicated process. Consideration should be made as to whether the utilisation of third-parties to manage customs declarations for you such as freight forwarders, customs agents or brokers, or fast parcel operators may be beneficial rather than processing the declarations in house. In any case, please do not hesitate to contact your relationship partner should you wish to discuss any of the above in further detail.

 

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