Get you business ready for Brexit – Time is running out!
With a no deal agreement in place, please see below for more information as to how Brexit may impact your business, from imports & exports to VAT & reverse charges.
How will importing from the EU after Brexit now there is a no deal?
After Brexit there will be no more intra EU supplies and all goods supplied between the UK and the EU will be exports. The UK will be treated like other non-EU countries and procedures when importing after Brexit from the EU will change. Goods arriving in the UK from the EU will be subject to VAT and potentially customs duty which is accounted for by the importer.
The transitional period will end on the 1St January 2021 and many businesses are still not prepared for Brexit.
Will the reverse charge still apply after Brexit?
Services supplied outside the UK are generally outside the scope of UK VAT. They will still be subject to the reverse charge after Brexit in the other EU country. EU VAT after Brexit is likely to change and the UK could introduce new VAT rules after Brexit. However, services bought from outside the UK will still be subject to the reverse charge after Brexit.
How can I export to the EU after Brexit?
Exporting to the EU after Brexit will mean that goods being moved to EU member states will become subject to Customs Duty. The customs duty rates are listed in what is known as a “common external tariff”, and the rate depends on the nature of the goods. Traders will need an EU EORI Number for exporting to the EU after Brexit.
How will VAT change after Brexit?
From 1 January 2021, there will be some changes to how to report VAT after Brexit. Brexit implications mean that import VAT can be postponed and it will mean you get an online monthly statement that will show the total import VAT postponed for the previous month which you should include in your VAT Return. Brexit VAT changes of postponed VAT accounting will result in changes to the way you complete the boxes on your VAT Return. You must account for import VAT post Brexit on your VAT Return and include the date that you imported the goods
Will there be a new distance selling threshold between EU and UK? How will the distance sales be treated?
The distance selling threshold in the UK will no longer apply to businesses and sales of goods to EU consumers will be zero rated. UK businesses who are distance selling are advised to review their current arrangements and may need to register for VAT in more EU countries to deal with import VAT post Brexit. Low Value Consignment Relief (LVCR) will be abolished from 2021. There will be new rules for online marketplaces and good values under £135. If goods are sold via online marketplaces (OMP) it is the OMP that will be responsible to collect and account for VAT.
When will I have to do the custom clearance and submit customs declarations after Brexit?
The UK Government says that border controls will be phased in between 1 January 2021 and 1 July 2021. Basic customs clearance after Brexit will apply from 1 January 2021, but for most goods businesses will have up to six months to submit customs declarations and it will be possible to defer duty payments until the customs declaration has been made.
What will be the VAT position between Northern Ireland and Ireland?
As part of the WA, Northern Ireland (NI) will enter a special VAT and customs relationship with the EU.
NI will remain within the UK VAT area, it will continue to use EU rules, including zero-rating for VAT on intra-community supplies to Ireland.
EU VAT on imports to Northern Ireland will be managed by the UK authorities.
Will the Moss scheme still apply? Will I need to register for VAT in the UK?
Businesses will no longer be able to use the UK’s Mini One Stop Shop (MOSS) portal to report and pay VAT via a single return on sales of digital services to consumers in the EU. Businesses who wish to continue to use the MOSS system will need to register for the VAT MOSS non-Union scheme in an EU Member State. This can only be done after the transition period ends. From 1.1.2021 the £8818 threshold will no longer apply for digital services between the UK and EU non-VAT registered customers.
Will my current EORI number still be valid or will I need a new one?
From 1st Jan 2021, a GB EORI number will be required to move goods between the UK and the EU. You may also need one if you move goods to or from Northern Ireland. You will not be able to use an EU EORI number after Brexit to import goods to the UK.
What will import taxes be on imports from the EU after Brexit?
All goods that go through UK customs clearance from 1 January 2021 will be subject to the UK Global Tariff rates. This is largely based on the Common External Tariff which is currently relevant for imports from outside the EU.
You can check the UK Global Tariff rates here
Will import duty on EU imports to the UK be lower than from non EU countries?
Currently the rates of UK import duty are set in the UK Global tariff. The UK tariff rates for EU countries are currently mostly like the rates for non-EU countries. As the UK becomes autonomous in setting customs duty and VAT rates after Brexit, they are likely to diverge in the future.
Frequently Asked Questions
Yes, when you are exporting to the EU after Brexit you can zero rate exports from 1 January 2021. You must provide proof that the goods have left the UK. Zero rating exports to the EU will still mean import taxes are payable at the other end when importing to the EU.
EC Sales List after Brexit will no longer be required, but the Government announced that intrastat declarations post-Brexit would still be required.
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