Blog
It's time to prepare your
business for Brexit
We’re sure that we can all agree that it’s been a hectic year for everyone, and whilst we are nearing the end of 2020, there’s one pretty major thing still pending on the ‘to do’ list. BREXIT!
Read below to find out more....
The transition period is due to come to an end at the end of this month and if your business deals with the EU then you need to prepare for changes taking effect from 1 January 2021.
While talks are ongoing about the future trading arrangements with Europe there are certain actions that you can take now in order to prepare for this date.
Dealing with Customs – after 11pm GMT on 31.12.20
1. If you haven’t already, then apply for a GB EORI number. If you don’t have one you will NOT be able to import and export goods into the UK. HMRC have automatically sent these to VAT registered businesses but if you don’t have one or are not VAT registered, you need to apply:
https://www.gov.uk/eori?step-by-step-nav=db1149f5-f60a-4d02-be0c-9c9db2828665
2. Apply for an EU EORI number – you may need this if your business is making customs declarations or getting a customs decision in the EU.
3. Consider using the services of a Customs Intermediary to help meet the complicated customs requirements for example submitting the required declarations.
If you are going to do this yourself then you will need access to HMRC customs systems and will need to purchase specialist software. There are government grants available to help with the costs associated with doing this yourself
https://www.gov.uk/guidance/appoint-someone-to-deal-with-customs-on-your-behalf
4. Apply for a Duty Deferment Account (DDA). This allows customs charges e.g. customs duty, excise duty and import VAT, to be paid once a month by direct debit instead of being paid on each consignment at the time of import. To take advantage of this you will need to apply for a deferment account number (DAN) and be authorised by HMRC.
5. Start accounting for VAT on imported goods. From 1 January 2021 if you’re VAT registered and choose not to defer your customs declarations as above then you can choose to account for import VAT on your VAT return using a system called ‘postponed accounting’. You will need a GB EORI number to do this and instead of paying import VAT at the point of entry, you would treat the import VAT as the amount of VAT due in Box 1 of the VAT return and reclaim the same amount in Box 4.
6. Account for VAT on exports to the EU. These are likely to be zero rated. The completion of EC Sales lists will no longer be required, but proof of export will be needed in the same way as for non-EU exports under current rules.
https://www.icaew.com/brexit/uk-vat-after-the-transition-period
Note – Northern Ireland effectively will remain part of the EU for selling and moving goods. This means that different rules will apply and a different EORI number will be required. The sale of goods between NI and the EU states will continue under the existing rules. However, supplies between NI and the rest of the UK will be treated as imports and exports.
This transition may seem pretty daunting and overwhelming but we are confident that if you follow these steps above, then you will be well on the way to being prepared for post Brexit rules and regulations. Should you require any further information or assistance then please do not hesitate to get in touch.
Disclaimer: The information contained in this article is intended to be a guide and is not intended to be exhaustive. No action should be taken on the basis of information contained herein without obtaining the necessary advice. No responsibility can be accepted for loss or damages occasioned to any person acting or refraining from acting as a result of the material contained herein.
