Brexit - Import / Export / VAT Returns
We are also now less than 50 days away from Brexit and like it or not we all need to be ready. Brexit will impact every business in some way, some more directly than others. This is a developing situation but based on our understanding today (13th November) we highlight here the facts about Brexit that will help your business with the transition next year.
In our previous articles we have shared in-depth what steps you should have taken. If you need to familiarise yourself then please revisit those by following the link:
Importing to GB from the EU
Many of the rules apply to the countries within Great Britain (England, Scotland & Wales) because the full extent of the border with Northern Ireland are not yet clear.
Generally speaking, importing goods from the EU will be like importing from the rest of the world. You will need an EORI number starting with GB. Please visit the government page for further details https://www.gov.uk/eori
You will also need to make a customs declaration and make VAT Payments, but these can be postponed (see below).
During the first six months i.e until 30th June 2021 you can opt to make a supplementary declaration rather than a full customs declaration for the imported goods. Basically, this means that you record the goods in your own bookkeeping records and account for VAT. To do this, you should have applied for authorisation, get a CHIEF number (and have software that can access CHIEF) and have a duty deferment account.
These are complex areas and therefore you may want to appoint a Customs Agent to help with the process for you. Many of the Freight Agents offer this service too and due to the expected rise in demand they have been given funding to recruit and train. You should contact your Agent if you have not done so already.
Postponing VAT & Completing VAT Return
You can use postponed VAT accounting on your imports to avoid paying VAT upon goods entering the UK. Speak to your Agent about this.
You will need to declare the import VAT on your VAT Return to avoid paying the VAT and then reclaiming later. An online monthly statement will be available which will show the total VAT postponed which should be included in your VAT Return.
You will need to include the postponed VAT in Box 1 and Box 4 of the VAT Return. You will also include the total value of the imports in Box 7.
This process is very similar to the current Reverse Charge process we use when importing from the EU.
If you choose to delay your customs declaration, you will need to estimate the import VAT due from your own records. Once the delayed declaration is submitted you can then adjust your estimate.
The only exemption is if the imported goods are valued at £135 or less. In this case the reverse charge rules will apply if the supply is to a VAT Registered business or alternatively you account for it under normal VAT rules if supply is to an individual or non-VAT Registered business.
Exporting to the EU and to the rest of the World
Again, broadly speaking the rules will be like those that currently apply to non-EU countries. This means VAT will not apply to the exports.
Of course, there will be a need to make a customs declaration and again the easiest option as mentioned above is if you use an Agent. You will need your GB EORI number.
Also, as we leave the EU, we will not necessarily have agreed Trade Deals with all the non-EU countries. You might find that there are other countries to consider and we suggest that you look at each of these countries individually by following the link below:
For the export of goods or the supply of services made to EU businesses on or after 1 January 2021, you will not need to submit EC Sales List (ESLs). You will have until 21 January 2021 to submit ESLs for sales made before 1 January 2021. You will still need to submit ESLs if you sell goods from Northern Ireland to EU VAT-registered customers. More information will be published later.
If you have further questions please contact your normal director or manager or if you are not a client please email mailto:firstname.lastname@example.org