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Checklist for VAT and Customs after Brexit

The UK is no longer a member of the EU’s Customs Union or VAT regime. This creates new customs issues, as well as import VAT and registration obligations, for any business selling or moving goods between the EU and the UK. Below is a checklist of basic steps to take to ensure that your shipments are not held up at customs, taxes are kept to a minimum, and you are not on the radar of the tax authorities.

For the following, you’ll need a GB and EU EORI number:

  • Customs declarations are required to move your goods into the United Kingdom or the European Union.
  • UK/EU customs correspondence and rulings

Importers and exporters from the United Kingdom into the European Union will need to hire a customs representative and use their EORI number. This is due to the fact that they are no longer residents of the EU Customs Union. Non-resident importers’ Customs activities are also restricted in the UK (for example, on simplified declarations), which may necessitate the use of a local customs representative.

Standard product identifier (8-digits for EU; 6-digits for UK). This information is required for customs declarations and tariff calculations.

The EU-UK Trade and Cooperation Agreement ensured tariff-free and quota-free trade between the two countries. Traders must, however, adhere to the ‘rules of origin,’ which prevent tariff evasion by routing deliveries through non-tariff countries.

The HMRC in the United Kingdom will allow a one-month duty and import VAT deferment account. Traders will no longer require a guarantee. Businesses that are based in the United Kingdom are eligible.

Import VAT payments will be deferred until your next tax return. For UK and foreign businesses, this was implemented on January 1st. Imports from the United Kingdom are subject to the same restrictions in many EU countries. Be aware that some countries, such as Germany, do not!

If you use the distance selling thresholds to sell from UK stocks to EU consumers or vice versa, you may need additional VAT registrations.

You’ll need a new MOSS registration in the EU if you’re using the single Mini One-Stop-Shop EU VAT return. If you’re selling in the UK from the EU, you’ll need a new UK registration.

In up to 19 of the EU’s 27 countries, UK businesses with an EU VAT registration will require the services of a Fiscal Representative.

On goods returned by EU or UK customers, e-commerce sellers may face double charges. Returned Goods Relief can help you avoid this.

If sellers do not first clear their goods through customs and VAT checks, most major marketplaces will block them from shipping to the UK or EU.

HMRC VAT rules on ecommerce imports and marketplace liabilities changed on January 1, 2021, in addition to the Brexit VAT changes. On imports, you must charge £135 in UK VAT. For their sellers, marketplaces also become a “deemed supplier.

You won’t be able to use the United Kingdom in a supply chain VAT triangulation simplification any longer. This may necessitate a rethinking of your supply chain. You can still use an EU VAT number in a triangulation that does not include the UK as a UK business.

This will change if you are holding stocks in the UK at a customer’s warehouse and are not VAT registered in the UK under the Consignment Stock rules. Imported goods must be treated as such when they arrive in the UK.

Northern Ireland’s VAT rules are complicated. Check out our VAT table for Northern Ireland, the United Kingdom, and the European Union.

There will be no immediate changes to VAT on services as a result of Brexit. The United Kingdom will initially adhere to its existing “use and enjoyment” regulations. However, certain UK B2C services to EU consumers and vice versa have been modified.

Do you require assistance with your VAT compliance in the United Kingdom?

The first step in determining your VAT compliance requirements is to research UK VAT legislation. TAS Consulting offers a variety of solutions to help your business succeed, depending on where and how you do business.