Our accountants have developed a 10 points list for business starting to trade with EU.
GB EORI number
A GB EORI number is essential who a business who imports and exports. The number is needed for the customs declaration procedure. HMRC usually issues a EORI number within four days. Please ask uk-accountant how to apply.
Consider using a customs agent or a freight forwarder
HMRC has stressed the importance of correct declarations which can be quite complicated. A lot of importers are using outside agents rather than doing them in-house. Use the suggested list of agents to assist you with your declarations.
Consider using postponed VAT accounting for all imports (PVA)
If a UK business starting to trade with EU is VAT registered, they can request for postponed VAT accounting for all imports. VAT is not payable when the goods arrive in the UK. The VAT will be accounted as a reverse charge instead in the next VAT return. An election for postponed accounting should be made for each shipment. Check your eligibility for postponed VAT accounting.
VAT for imports of £135 or less
If a UK business starting to trade with EU buys goods from overseas sellers and these shipments are not more than £135, the overseas seller is required to charge a UK VAT for each such shipment. Such sellers are obliged to register for VAT in the UK. However, if the buyer provides their VAT number when placing an order, VAT will not be charged. A reverse charge entry will apply in Boxes 1 and 4 of the buyers VAT return. See more guidance about £135 threshold.
All exports from the UK are zero rated
All exports from the UK are treated as zero rated, with no difference between exports to EU and non-EU countries. Proof of export should be retained to proof zero-rated export.
EC Sales lists and Intrastat have been abolished
Although EC lists and Intrastat have been cancelled, a business still needs to complete Intrastat arrivals return it if it buys goods from the EU and the annual sales exceeds the threshold of £1.5 million. Intrastat dispatch return is no longer required. In NI a business still needs to complete Intrastat dispatch return and EC sales lists for goods but not for services.
If supplying digital services to non-business EU customers, register for non-Union MOSS
Before Brexit, an annual threshold of £8,818 used to apply to UK businesses who supplied broadcasting, telecommunication, and electronic services to B2C customers. They did not need to register for VAT and MOSS scheme until they reached this threshold in the countries of supply.
After Brexit a zero threshold applies. A UK business need to register for non-EU MOSS even if they make or intending to make just one supply to a B2C customer. It can register in any country they choose or in each country they make digital supplies to. Check how you can register for non-Union EU MOSS.
Many B2C services are not subject to VAT for B2C customers
A lot of services listed in Notice741A section 12 are no longer subject to a UK VAT if supplied to B2C customers in EU. Before 1st of January such services were not taxable for outside of EU customers. After Brexit the concept ‘’outside the EU’’ has become ‘’outside the UK.’’ However, a business should check they need to register for VAT in a EU country under the concept of ‘’use and enjoyment.’’
Reclaiming overseas VAT
According to the 13th Directive, if a UK business starting to trade with EU incurred VAT in a EU country, they must claim it through that country’s tax authorities by submitting a paper claim by a strict deadline. Such claims must be usually submitted in the language of the country where such VAT was incurred. Check how to claim EU VAT.
Consider registering for Trader Support Service
Trader Support Service is a free resource that help businesses who move goods between Northern Ireland and the GB. They will provide advice ad help with paperwork required. Check how to register for Trade Support Service online.
Further advice and support available from our experts. Get in touch.