We are less than one month away from the end of the Brexit transition period; the point at which the UK officially leaves the European Union. For businesses, this means new processes, protocols and procedures.
In this blog, we explore how your business can approach just two of these issues: customs and VAT.
Here’s what you need to know:
After the UK leaves the EU on 31 December 2020, the Government will be free to impose its own customs and VAT regimes.
Until now, the UK and the EU have shared the same customs and VAT schemes, which made moving goods between the UK and the EU seamless and simple.
However, you must now take action if your business is to continue trading smoothly and avoid disruption. Actions to consider include:
- Hiring or training a customs intermediary to complete and submit declarations
- Applying for a duty deferment account, enabling duties to be paid once a month as opposed to on individual consignments
- Preparing to pay or account for VAT on imported goods
- Ensuring you have International Driving Permits, and
- Applying for a GB Economic Operator Registration and Identification (EORI) number.
If you are a business who imports or exports products overseas, you may be entitled to grant funding. The funding, if secured, can help you to cover costs associated with recruiting, training and adapting your business to the new demands of global trade.
While most UK businesses will be able to rely on specialist customs intermediaries to process goods, VAT will likely prove more difficult.
The VAT rules around importing and exporting goods to and from the single market will change after the end of the transition period. This includes when and where VAT should be accounted for.
Although VAT will now be payable on import of goods from every country (including the EU), a new “postponed VAT” accounting regime should help businesses avoid cash flow issues.
This scheme will enable you to account for VAT on imported goods on your next VAT return. Goods can be released from customs without the need for immediate payment, therefore.
How can George Hay help?
Clearly, there is a lot to digest where Brexit is concerned, and you cannot anticipate every possible scenario. However, doing something will be infinitely better than doing nothing at all in the meantime. Our expert tax and business advisers can support you to ensure that you can continue to run your operation in a tax-efficient and compliant manner. To discuss your circumstances in more detail, contact us today.
To read more about VAT after Brexit, click here.