The end of the transition period on 31 December 2020 is rapidly approaching. It is essential that businesses familiarise themselves with the new rules for trading from the UK from 1 January 2021. Below is a list of some key points which businesses need to consider as soon as possible. We have provided links to relevant guidance where possible to assist.
Important action points
Do you intend to move goods to the EU after 31 December 2020?
- Ensure you have the necessary EORI numbers
- Consider the need to VAT register in other EU countries if you are importing goods into those countries
- Consider incoterms for intra EU movements and the impact on customer experience. It is likely to lead to a better customer experience if goods arrive in the EU Duty and VAT paid but will add to your costs and may lead to obligations to VAT register
- Consider appointing a Customs Agent to deal with declarations regarding the movement of goods on your behalf
- Do you need training on making customs declarations? You may be able to benefit from HMRC grants
- Consider the impact of the changes on delivery times. You may wish to consider holding stock in an EU Member State
HMRC Resources
Do you intend to move goods into the UK from the EU or RoW after 31 December 2020?
- Ensure you have the necessary EORI numbers and understand the steps required in making a customs declaration
- Ensure your accounting systems can deal with Postponed Accounting. Postponed accounting will be used for imports from all countries, not just the EU.
- Consider appointing a Customs Agent to deal with declarations regarding the movement of goods on your behalf
- Consider the special rules applying to consignments not exceeding £135
- Do you need training on making customs declarations? You may be able to benefit from HMRC grants.
HMRC Resources
- Preparing to Import to Britain From January 2021
- How to Import Goods from the EU to Britain (pdf document)
- Declaring Goods Brought into Britain from January 2021
Do you make supplies to Consumers in the EU?
- Consider whether it is beneficial to make B2C supplies from an EU location to continue to benefit from Distance Selling thresholds. Make sure you are aware of incoming ecommerce rules. These will be effective from 1 July 2021
- Consider incoterms for intra EU movements and the impact on customer experience as mentioned above.
Do you make supplies to or from NI?
- If you trade between NI the EU – including the Republic of Ireland (RoI) – and the UK make sure you understand the rules specific to such trade. The VAT treatment of these supplies differs from other countries due to the difficulties arising in establishing a border between NI and the RoI. This advice continues to be updated with the latest guidance on supplies between NI and the UK being issued on 26 October 2020.
Are you already VAT registered in or do you need to register for VAT in any of the EU27 countries?
- Consider if you need to appoint a tax representative in any EU countries where you have a VAT registration. Currently 19 of the EU27 have this requirement from 1 January 2021 and you should investigate the position in any countries in which your business is VAT registered (or will be required to be registered after 1 January 2021) to ensure you meet this requirement and have time to find a tax representative. A list of the countries which require a representative can be found here.
Do you incur business related costs in EU countries where your business is not established?
- If you incur VAT on expenditure in any of the EU27 countries you should ensure any cross-border claims are submitted before the 31 March 2021 and consider if you need assistance in making these claims for expenditure incurred after 31 December 2020
Do you supply electronic services?
- If your business involves supplying electronic services (this can include e-books, certain online training etc) in the EU consider whether you need to register for non-union MOSS.
This bulletin aims to provide some useful information and points of reference for businesses which are currently engaged in the administrative challenge of Brexit preparations. It is not intended to be a comprehensive statement of the law or policy in either the UK or EU. If you need to speak to an expert in more detail about how Brexit may impact your business, please contact us. We would recommend you regularly check HMRC’s website to ensure the position as stated in the document has not changed.