Prepare for Brexit

VAT and Customs Brexit Advice

The UK left the EU on 31 January 2020 and the VAT and Customs rules that previously applied to UK businesses trading with the EU have continued and will be in place until 31 December 2020.

With the COVID-19 crisis still ongoing and negotiations between the UK Government and EU around certain tariffs and quotas still to be resolved, it does not allow for a lot of time to prepare.  Whether there is a deal or not, UK businesses will need to make significant changes to the way UK businesses trade with EU suppliers and customers. Some businesses have already undertaken such assessments to maintain a competitive advantage: if you have not acted yet, we recommend you do so now.

Who is likely to be affected?

If you buy or sell goods with EU supplies and customers and wish to continue with this you will be affected by the new rules that will come in on 1 January 2021.

If you are a UK business and you wish to sell goods to EU consumers or digital/electric services to EU consumers you will also need to take action.

Other sectors such as travel businesses will also face new rules.

How we can help?

We have published a number of articles and have produced links to HMRC resources which might help you understand these changes.  Our Brexit review services is still available if you wish to chat through the potential issues with a VAT and Customs expert and we also can assist with implementing VAT and Customs measures in the UK if you will be importing goods from the EU going forward.

  • Brexit are you ready? – An overview of when Brexit may impact your business and what to consider.
  • Post Brexit – Businesses need to consider the new rules that will come into force from 1 January 2021 in relation to trade with EU countries including importing goods, import VAT, postponed VAT accounting, how to complete your VAT return and Customs Duty.
  • New Year, New Changes: MOSS Updates – The end of the Brexit transition period on 1 January 2021 will bring new changes that will impact any business that currently supplies digital services to EU consumers and currently uses the MOSS scheme in the UK – what is required?
  • Trading in goods post-Brexit – Practical issues focusing on goods involving overseas sellers
  • Customs Overview – With Customs Duty to become the normality, what should businesses be considering?
  • EORI Numbers – If your business will be selling goods to consumers between the UK and EU from 1 January 2021, it will need to ensure it has the appropriate EORI numbers to avoid goods being held by customs in the UK or EU.
  • Do you import goods? Do you need to sign up for CDS? –  If you want to import goods into the UK from 1 January 2021, you will have to register for the Customs Declaration Service (CDS).

We offer reviews of your business to analyse the impact of Brexit on your operations. Our indirect taxation specialists will discuss your business with you to provide advice on your preparations.

Analysis

Our review will look at YOUR business and focus on your current dealings with suppliers and customers in the EU and your supply chains.

We will outline what changes need to be made to your procedures and processes and whether these changes will result in any additional costs to you.

We will look at the implications of your staff travelling to the EU for conferences, trade fairs or meetings (including Northern Ireland).

Training

We will provide training to your finance staff in basic Customs declarations and provide guidance on the wider commercial impact of trading with third countries.

Our training will outline the general changes that trading with EU will bring for goods and services and then focus on the specific changes as they relate to your business.

Recommendations

From our analysis and discussions with key personnel, we can make recommendations which might alleviate cash flow or cost burdens for the business and assist in decision making to protect particular markets.

Our aim is to work with the business during this process to ensure that Brexit does not disrupt the business’ plans for the present and for the future.

We can assist your business implementing Customs procedures such as Duty Deferment Accounts, Customs Warehousing and Inward Processing Relief (“IPR”)

International options

Chiene + Tait is part of an international network of firms, AGN International, which has offices in most major cities and countries of the world.

Some businesses may have to consider setting up a branch or hold stocks of goods in other EU countries depending on their circumstances. If this is the case, Chiene + Tait is well place to be able to deal with this through our international network of colleagues.

Non-UK suppliers of digital services to UK Consumers

Any business that sells digital services to UK-based consumers will be unable to use their current EU MOSS registration to report sales to UK consumers from 1 January 2021. These businesses will be required to apply for a regular UK VAT number to report any digital sales to UK customers.

Please note, there is no turnover threshold for this.

All UK sales will be required to be immediately reported to HMRC from 1 January 2021. This will apply to all EU and non-EU based digital businesses making supplies to UK consumers.

Non-UK suppliers of goods to UK Consumers

A new model for the VAT treatment of goods arriving into the UK is to be introduced from 1 January 2021.

For EU and non-EU businesses selling products (goods) to UK consumers in consignments not exceeding GBP135 in value, the point at which VAT is collected is moving from the point of importation to the point of sale. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments.

Therefore, from 1 January 2021, for goods sent from overseas businesses which are sold directly to UK consumers, the overseas seller will be required to register for VAT in the UK and account for the UK VAT to HMRC.

See our diagram:

EORI Numbers

From 1 January 2021 businesses will need an EORI number to move goods between the UK and the EU and vice versa. When a business imports into the UK or EU, it will have to include its EORI number on declarations for customs to check.

Prior to Brexit, UK EORI numbers were accepted by the EU and vice versa. This will stop from 1 January 2021.  Therefore, businesses trading goods between the EU and UK will need both an EU EORI and a UK EORI number.

Llanelli Railway Goods Shed Trust

“I am very happy to endorse Chiene + Tait. We have received invaluable advice from them regarding VAT issues. They have been very thorough and efficient throughout and have acted on our behalf in dealing with HMRC. They identified major savings on the VAT on the capital cost which has enabled our project to move forward.”

Neil Sutherland, MD, Makar

“We were introduced to Chiene & Tait in relation to an R&D tax credit application to HMRC and to say were were delighted with the outcome is an understatement. The specialist service provided made all the difference for a very successful claim and subsequent financial payout. Since this initial experience we have not hesitated in working with Chiene & Tait in subsequent years with continued success. I would reconvened their services to any progressive organisations engaged in R&D activities.”

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Tabatha McCree-Cox, Tarbraxus Distillers

“Chiene + Tait offered that expertise which is really important. They have a very friendly team. For example, Kerry on the VAT side has been really good, very detailed: she sets out the information very clearly along with what needs to be done. They are so much better than the previous firm we used.”

Richard Cooper, CEO, Novosound

“Novosound chose to engage with Chiene + Tait for specific tax advice prior to commencing its spin out. We chose C+T due to their deep knowledge of tax treatment with respect to share issues at company formation. This knowledge was exceedingly useful before and during the spin out process. The firm was easy to deal with and when a particular issue arose at the 11th hour, they dropped everything and developed a practical solution that suited all parties. All together C+T are a great firm to work with.”

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Gillian Brown

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Karen Stark, Head of Finance, Care Visions Group

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Enable Scotland

“As an organisation, we have had a hugely positive experience working with Chiene + Tait. The firm is easy to work with, flexible and promotes a real sense of confidence in their work and advice.”

Barry McCorkell, Director, Aubrey Capital Management

“I had no hesitation in asking for advice from the Chiene + Tait team when HMRC selected us for an Employer Compliance Review. Having longstanding trusted advisers at our side made it a lot easier and a lot less stressful! HMRC’s recommendations were quick to be addressed and adopted so the review, which could have been a challenging and unnerving experience, was instead professional and efficient. I would have no hesitation in recommending the C+T team to anyone in the future.”

Neil Wilkie, COO, Mironid

“We have been delighted to work with Chiene + Tait on our R&D tax credit claim over the past few years. The guidance and professionalism of the C+T team has resulted in a smooth submission process with a concomitant successful outcome. I’d highly recommend their services.”

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