Has the last minute trade deal had an impact on your Brexit preparations?
The Trade Deal and Cooperation Agreement ensures that goods will continue to move between the UK and the EU with no imposition of tariffs or quotas if the goods originate in the UK-EU free trade area. There were also special measures announced to reduce red tape for medical and chemical products, organic products, wine and vehicles. Hauliers are still able to operate between the UK and the EU with no European Conference of Ministers of Transport permits required.
However, as the UK has left both the Single Market and the Customs Union, businesses will need to adopt new customs and regulatory procedures to trade with the EU. The good news is that these haven’t changed as a result of the deal; you need to follow government guidance in connection with the ending of the transition period. The exact requirements will depend on what your business does, and whether you import or export (or both). Some of the key points affecting transactions with EU countries are:
- Since 1 January 2021 VAT will need to be accounted for on goods imported into GB. You can account for this on your VAT return using postponed accounting for the appropriate VAT period rather than at the time of entry
- Some goods exported may require an export licence
- The UK has a six-month deferral for customs declarations on inbound goods from 1 January 2020, but there is no reciprocal equivalent for exports
- Intrastat returns will still be required for imports for the time being but aren’t be needed for exports
- EC Sales Lists are for periods after 31 December 2020 are no longer be required
- Goods exported from the GB can be VAT zero-rated, as long as you retain proof of departure, i.e. the goods actually leave
- You must make customs declarations using your own system or by using a customs intermediary.
You should use the guidance here as a starting point, particularly the links under the heading “changes for businesses and citizens”.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.