VAT

Post Brexit Advice for Businesses

By RJP LLP

General

If you are importing or exporting goods after 31st December, you will need an EORI number. You can apply online and it is not too late.

If you are moving goods to/from Northern Ireland from GB, you may need to register for the Trader Support Service (TSS) and have a separate EORI number. This document does not cover these scenarios.

Exporting

If you export goods to an EU Member State after 1st of January 2021, you will no longer need to obtain your EU customer’s VAT registration number and record it on your sales invoice to support zero rating.
You will need proper export evidence to support any zero rating. Now is the time to refresh your memory as to what proper export evidence is! See HMRC’s Public Notice 703.
Who is going to do your export declarations? Most businesses have an expert – speak to your freight forwarders/parcel collection firm
A commercial invoice will be required for your shipments. Speak to your freight advisers regarding what is needed if you are not sure.
Agree your incoterms (International Commercial Terms) with your customers – these are the terms you ship under. For example, if you are delivering DDP (delivered duty paid) you will be responsible for any import VAT and duty in the country of destination. But if you deliver DAP, your customer will be responsible for import VAT and duty.
If your customer is coming to pick up the goods, charge them UK VAT until such time as they provide you with the proper export evidence! Because if you don’t, this can get costly for you. Also, with these types of indirect exports (i.e. where the customer arranges the transportation) always check to make sure your customer does not have an establishment within the UK. This is because if they do, you will not be able to zero rate this indirect export to them. You will only be able to zero rate if you are responsible for the transportation of the goods outside the UK.

Importing

Have you checked the incoterms with your suppliers? Are they delivering to you DDP or DAP (see above) or under other terms?
Have you checked to see if duty is payable on the goods coming into the UK? Duty cannot be claimed back and is an absolute cost to your business. Confirm the commodity code with your supplier but always check it is correct by using the government’s trade tariff tool online.Here is the guidance how to use the trade tariff tool…https://www.gov.uk/guidance/using-the-trade-tariff-tool-to-find-a-commodity-code
And here is the tool itself

https://www.gov.uk/trade-tariff

Remember, if you get commodity codes wrong, you could be under or overpaying duty.

If you do find you will be incurring duty on your imports, consider opening a duty deferment account.
Who is going to do your import declarations? You may be able to defer import declarations, duty and VAT payments for EU imports until 30 June 2021. However, you will still need to make a supplementary declaration and to do this you need authorisation to use simplified declarations (or you can use someone dealing with customs who already has an authorisation – speak to your freight people).
Postponed accounting is coming in with effect from 1 January. This is simply accounting for import VAT on your VAT return regardless of where in the world the goods have come from. You do not need to apply separately for it, you just do it by completing your VAT return differently as per below.Box 1 include the VAT due in this period on imports accounted for through postponed accounting you will be able to get this information from your online monthly statement see below or you must estimate the amount if you do not have a statement and have delayed your customs declarationsBox 4 include the VAT reclaimed in this period on imports subject to the normal rules. Box 7 include the total net value of all imports of goods in this period.
If you have delayed your customs declaration, you must still account for import VAT on the VAT return which includes the date you imported the goods. To complete the boxes on your return, you’ll need to estimate the import VAT due from your records of imported goods.

You must account for postponed import VAT on the return for the accounting period which covers the date you imported the goods as follows:

When you submit your delayed declaration, you must select that you’re accounting for your VAT on your return. Your next online monthly statement will show the amount of import VAT due on that declaration and then you will be able to adjust your estimate and account for any difference on your next VAT return.

https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat4

• C79s will no longer be sent as proof of import VAT paid. Instead you will have an online monthly import VAT statement that you can log on to and you should reconcile this statement to your own record of imports. Unless you have delayed your customs declaration, each statement will show the total import VAT postponed for the previous month. Your statements will become available to view in the first half of each month. You’ll only be able to access a statement for 6 months from the date it is published, so you must download and keep a copy of each statement in your records or you risk not being able to claim the import VAT back.

To get access now, go to

https://www.gov.uk/guidance/get-your-postponed-import-vat-statement

Retailers

For client who sell goods to consumers in EU member states, they must consider who is going to be liable for the taxes in the country of destination i.e the import VAT and maybe duty.

From July 2021 there will be a one stop shop that UK retailers may have to register for to take account of their EU VAT liabilities.

Reporting Responsibilities

No EC sales list after 31.12.20
VAT return will change at some stage, but we don’t know how at the moment
No Intrastat for dispatches required after 31st December 2020
Intrastat still required for arrivals from the EU until the end of 2021.

If you need any help with VAT compliance and getting ready for Brexit, please contact us by emailing partners@rjp.co.uk.

How to get onboard with RJP

Talk to us

Have an initial discussion with a member of the RJP team to identify ways we can enhance your business's growth with our comprehensive support and strategic advice.

Hassle-free migration

Choose RJP and we'll smoothly manage all transitions, handling paperwork, coordinating with your current accountant, and ensuring no deadlines are missed for a worry-free experience.

A pathway to growth

Finally, we will send you the required documents to sign and return, leaving you to continue leading your business, backed by our abundant, responsive advice and support.

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