GET READY FOR BREXIT
Prepare your business for upcoming changes by taking
some simple steps
Prepare your business for upcoming changes by taking some simple steps
In March 2017 the British government invoked Article 50 of the Treaty on the European Union following a referendum on EU membership in June 2016.
At present the British government have been unable to agree a deal for the withdrawal from the EU and although there is a new extension which will delay Brexit until 31 January 2020 the UK and Northern Ireland are at risk of a No Deal Brexit.
If a No Deal Brexit (also known as a Hard Brexit) occurs, then the UK would become a ‘third country’ with respect to EU imports.
A third country has no trade agreements with the EU, and goods that are imported into the EU are subject to the tariffs that the EU have registered with the World Trade Organisation only (WTO tariffs).
Additionally, the EU VAT scheme that works so effectively at present will no longer be valid. Due to these changes there will be a more complicated customs clearance process. VAT will have to be paid in the UK when exporting from the EU. So, VAT will be charged along with customs.
What You Can Do to Get Ready for Brexit
Step 1: EORI Registration
In the event of a no deal Brexit, companies exporting from the EU to the UK and visa versa will need to have a new EORI number (Economic Operators' Registration and Identification number)
At present you only need an EORI number when trading with countries outside the EU to release goods from Customs. Post-Brexit you will need this to trade with the UK too. It should be noted that UK-issued EORI numbers will not be accepted by EU countries post-Brexit, so you will need to register for an EU issued EORI number if you want to continue trading between the EU and UK.
If you have an EORI number issued by a member state other than the UK, you’ll need to obtain a UK EORI number for post-Brexit UK imports and exports.
EORI Registration Information:
Step 2: Value Added Tax on Exports
If you are exporting goods you will need to prove to the local customs authorities that the goods have been exported to a third country, i.e. Export from the UK to a third country or Export from the EU to a third country.
The details you will need to provide will depend on the requirements of the national customs authority and these will include; Export proof document, Airwaybills, Commercial Invoices and Track and Trace Information.
Once customs have accepted the proof of the export then the exporter can VAT zero rate the sale.
Step 3: Value Added Tax on Imports
VAT on imports can be paid in two ways either:
The exporter will pay all VAT together with all customs duties to the customs authority in the country of destination of the goods.
The Importer of the goods will pay VAT and customs duties on receipt of the goods.
You may wish to consider setting up a Deferment Account
For more details on post Brexit VAT: