There are now just 2 months left for you to ensure we are ready for the new tax and customs rules. The new rules will allow you to continue to trade with the European Union from the 1st of January 2021 if you are a UK VAT registered business.
We have previously written to you detailing the steps that you need to take so you can prepare for these changes. This post can help you to prepare for a free trade agreement or a no-deal.
Being Prepared
It’s vital that you act now. If there is a free trade agreement you will still need to be prepared. Unless you have all of the processes, agreements and contracts in place, you will be unable to trade with the European Union from the 1st of January 2021.
In order to send goods from Great Britain to your customers in the European Union, it will be your responsibility to complete the export declarations. You will have to complete the declarations from the 1st of January 2021.
You will need to make declarations for your imports and exports. This will allow you to move goods between Great Britain and the European Union. This is the procedure that is required when you are moving goods between the UK and any countries outside of the European Union. We would like to ensure that you know what the procedures involve and that you are ready when the time comes.
What is Changing?
From the 1st of January 2021, if you are a UK VAT registered business and wish to send goods from Great Britain to your customers in the European Union you will need to complete the correct export declarations.
If you wish to import any goods from the European Union that are controlled (such as alcohol, tobacco, animal products or firearms) you will need to make the correct declarations from the 1st of January 2021.
If you wish to import any goods from the European Union that are not controlled and your compliance record is good you can choose to defer the declarations. You can do this for a period of up to 6 months. However, you will be required to keep records of everything that you have imported. This record is known as an entry in declarant’s record. Details are available at GOV.UK.
If your compliance history is poor, you will be unable to defer your declarations. If this applies to you, you will receive a letter that explains that you are required to make full declarations.
If you are unable to defer your declarations or you choose not to, you will need to make full import declarations from the 1st of January 2021. You can find information about making full import declarations at GOV.UK.
From the 1st of July 2021, all traders that are moving goods will need to make declarations and pay the relevant tariffs. The payments are due at the time the goods are moved.
Where You Can Get Help
Learning how to fill in import and export declarations is not always easy. You will need knowledge about government authorisations, along with specialist skills. Not many businesses make their own declarations. They tend to hire another person to deal with the declarations on their behalf. Fast parcel operators and freight forwarding companies can help you with this. They might also be able to complete your import and export declarations.
Organisations such as these use HMRC’s systems daily which means they may:
- Have the authority to use simplified declarations
- Hold a deferment account that you could use
- Have access to a range of customs procedures that may mean you can delay paying import duties in some circumstances
As you will need to have everything set up by the 31st December 2021, it is a good time to speak to fast parcel operators and freight forwarding companies. Doing so may mean that you can continue to trade with the European Union.
Please note, you are responsible for providing the following details about your transactions:
- How often you import goods
- How often you export goods
- The kind of goods you are importing
- The quantity of goods
- The goods’ customs value. This is the invoice price for the goods and any additional charges that you will face at customs.
- Where in the European Union the goods are going
What You Should Do Now
If you would like to hire someone to deal with your import and export declarations for you go to GOV.UK.
Your Trader Checklist
If you run a business that moves goods between Great Britain and the European Union, you will be affected by the new changes. This is the case even if you move goods just once a year. Please note, you only have 2 months left to make a decision about your import and export declarations. This is also the amount of time that you have to prepare yourself for the new changes.
– Check Right Now
You should now check whether you need to make import and export declarations. You will need to if you wish to continue to sell, buy or move goods between Great Britain and the European Union, after the transition period.
– It’s Time to Make a Decision
It’s now time to decide how you will make the declarations. The sooner you do this, the less disruption your business will face.
You can hire someone to do this for you. This is what many traders do.
You can choose between:
- Fast parcel operators – They will transport your documents, freight and parcels across the world and within a time frame. They will also deal with customs on your behalf.
- Freight forwarders – They will transport your goods around the world and make sure they are cleared through customs
- Other customs agents – They will clear your goods through customs.
Alternatively, you may wish to deal with the declarations yourself. Please note, you will need to:
- Make sure that you have the skills and knowledge to complete the declarations correctly
- Apply for access to the IT system (CHIEF) so you can make the declarations
- Buy the required software and licences so that you can interact with HMRC’s systems
- Register for a duty deferment account. You will need this type of account if you wish to delay your declarations for non-controlled goods that you intend to import. You can defer declaration until the 30th of June 2021
- Make sure you do not underestimate how much time it will take you to deal with the declarations
It’s Time to Act
It is now time to act. If you wish to find someone to fill out your import and export declarations make sure you are ready to work with them from the 1st of January 2021. Visit GOV.UK.
If you wish to fill in the declarations yourself, you should visit GOV.UK/import-customs-declaration.
Customer Service – UK-Accountant
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Splitting a Family Business: VAT Issues