Make sure your business is ready to do trade with the EU from the 1st January 2021. If you are a VAT-registered business who trades with the European Union, we want to make you aware of some changes that are coming into effect from starting next year. This article is part of the Brexit news that we prepare for our clients on a regular basis. We understand that COVID 19 might have affected any preparations.
On the 12th June 2020, the British Government announced new border controls. These controls are to be placed on imports that are coming from the EU to Britain. These changes are to be introduced one stage at a time. This ensures that any customs declarations for goods that are not normally controlled can be delayed until the 30th June 2021.
What’s Being Changed?
As you may be aware, the UK is set to leave the European Union’s Single Market and its Customs Union according to Brexit arrangements. The change will take place when the transition period comes to an end. Beginning on the 1st January 2021, the United Kingdom will have a full and external border with the European Union.
From the above date, controls will be placed on the movement of goods between Great Britain and the European Union. From the 1st of January, you will need to submit a customs declaration when you are importing and exporting controlled goods.
Non-controlled goods will be introduced in 3 different stages. These stages will take place in January, April, and July 2021. Below, you will find more information about how this process works.
What you should do?
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Check that you have a GB EORI number:
By now, you should have a EORI (Economic Operator Registration and Identification) number. You will need to have this number to hand each time you complete a declaration at customs. If you do not have this number, make sure you apply for it as soon as possible. Apply for EORI number with us.
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Choose how you will make customs declarations:
Express operators, freight forwarders and Customs agents can help you with your declarations. They can also ensure that you provide all the required information.
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Check if your imported goods are to be controlled in stages:
Traders who have a good compliance record can defer their import declarations on most of their goods. They can do this for up to 6 months starting on the 1st January, 2021.
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Choose how you will account for import VAT on your customs declaration:
From the 1st January 2021, you can use postponed VAT accounting so that you can account for import VAT. You can do this on your VAT return for the goods that you have imported from anywhere.
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Determine if import VAT needs to be paid at the border:
If the value of the goods are not worth more than £135, you will not need to pay import VAT at the border. However, there are exceptions to this rule. VAT will need to be paid at the border on excise goods and gifts.
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Read the Controlled Goods list:
You will need to read the Controlled Goods list so you can determine whether you need to complete declarations. If you do need to complete declarations, you will be required to do so from the 1st January 2021.
If your imported goods are not on the list, you have the choice to import the declarations until July 2021
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Check the Tariff Tables:
You will need to check the tariff tables to consider how any future trade might be affected. There will be new rates for imports from the 1st of January 2021. These new rates will be known as the UK Global Tariff.
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Register for the Trader Support Service:
The Trader Support Service is free and can deal with processes that emerge under Northern Irelands protocol. The Support Service will run from 1st January 2021. You will need to register for the service on the UK government website. Please be aware that this service is unavailable for goods that are moved between the European Union and Great Britain.
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Stay Up-to-date:
You can stay up to date with all of the latest information. You can do this via the gov.uk website by selecting to sign up to help and support communications.
Import Processes that are to be introduced in 2021
Stage 1. 1st January 2021
- Importing goods that are not controlled – You will have a maximum of 6 months from the date of the goods arrival in Britain to pay import VAT and customs duty and customs declarations. You will be required to keep detailed records of any goods you import whilst also using postponed VAT accounting.
- Importing goods that are controlled – You will be required to submit customs declarations when goods such as these arrive in Britain. However, if you are placing them in storage temporarily you will not need a declaration. Please note, you can only store them for 90 before you need to submit a declaration.
If there is no Customs control system in place you will be required to submit the declarations before the goods have left the European Union. You will also need to inform HMRC that the goods have arrived.
- If you are using Excise Duty Suspension, the goods will need to be declared on the Excise Movement and Control System. You will need to do this by the end of the next working day after they have arrived in Britain.
- Pay the Customs Duty and import VAT immediately unless the imported goods are being entered into a Customs special procedure.
- If you are choosing to import live animals, animal by-products that are high risk, plant products or plant products that are high-risk you will be required to pre-notify the new IPAFFS (Import of products, animals food and feed system). You will also need to show health documents for the live animals or provide phytosanitary certificates for the plant products or for any high risk plants.
Stage 2. 1st April 2021
If you wish to import plans or products of animal origin you will be required to
- Use the IPAFFS to pre-notify
- Provide customs with health documentation
- Provide phytosanitary certificates for the plant products or for any high-risk plants
Stage 3. 1st July 2021
If you wish to import any type of product into Britain, you will be required to:
- Make proper and correct Safety and Security declarations. You will need to do this before the goods arrive in Britain.
- You can submit the customs declaration within 90 days of the goods arriving at a location. You can do this by using the temporary storage model. Alternatively, you can submit the declarations before you goods leave the European Union. You can only do this if they move through areas that use the pre-lodgement model.
- Pay the relevant import VAT and Customs Duty. This can be done when you submit the customs declarations.
Please note, there will be more physical checks for plants, their products, animals and their by-products and SPS commodities. You can also use postponed VAT-accounting should you wish to.
If you wish to find out more about how you and your business can prepare for Brexit, go to the Gov.uk webiste.
Please contact us if you need further clarifications on this topic.