VAT – No Deal Exit Special

VAT – No Deal Exit Special

With nearly a week to go, the issue of a “no deal” exit is still one that HMRC sees as a possibility.

HMRC have “prudently” been preparing for a “no deal” exit from the EU for several months. In the event of this happening, businesses moving goods to or from the UK will need to adopt procedures and paperwork to reflect the fact that any such movements are exports or imports from 29 March 2019.

Below are some of the steps businesses that deal in the international trade in goods can take now.

Get an EORI

An EORI is required by any business importing goods into the UK. Without it, goods cannot be cleared and further “easing” procedures, such as TSP (see below), cannot be applied for.

The format of a UK EORI will be:

Country Code (GB) + VAT number + 000.

Unsure if you or your customer have already got an EORI? Click here to check.

Need an EORI? Click here.

Transitional Simplified Procedures

HMRC have released details of Transitional Simplified Procedures (TSP) which we would strongly recommend relevant importers apply for.

Only importers are able to apply for this authorisation. Freight Forwarders, transport companies and intermediaries cannot.

The simplified procedure will apply to goods from the EU27 arriving in the UK via any Roll on -Roll Off (Ro-Ro) locations. A list of Ro-Ro locations is here.

Importers will need to record arrivals in their own systems. Greater detail of the exact information required is contained in the notice issued by Customs. As part of the approval process, it will give details of simplified payment methods for an initial period.

At the end of each calendar month you will need to submit the Customs Declarations.

Certain goods will be excluded from the simplification, or will require a Simplified Frontier declaration. Further guidance is awaited on this,, although excise goods and licensable goods will need a Simplified Frontier Declaration pre-lodged in advance of the goods arrival.

Goods arriving in the UK with a Community Transit document (T-form, NCTS, T1, or T2) will be excluded from this simplification. All goods covered by a Community Transit document will need to go to an approved premises for clearance.

For more details about the TSP and how to apply for this simplification with HMRC, click here.

Deferment Account

The treatment of import VAT will be “postponed” by allowing the importer to record this on their VAT return, rather than pay at the dockside. However, this will not apply to any duties payable. Indeed, one of the conditions of a TSP application is that the importer will have a deferment account. HMRC have said that TSP users will have “easier access” to a deferment account but details have yet to be confirmed.

You should ensure that as an importer, you or your agents (freight forwarder, etc.) will have the necessary deferment accounts in place.

Guidance on how to apply for a deferment account is available here.

If you have any questions about how the post Brexit landscape may affect your business, please contact us.

Ian Marrow
VAT Director
Tel: 01245 254219