Updated 21 December 2018
The trade that is carried out with the EU will broadly follow the customs controls that apply for the rest of the world, and there is likely to be an increase in demand for freight forwarders’ services from traders who had previously only worked within the EU or traded both within the EU and with the rest of the world. So you will need to adapt your business to comply with these new systems, processes and controls.
How customs processes will change
In a ‘no deal’ scenario, you will need to have a European Economic Operator Registration and Identification (EORI) number in addition to a UK EORI number, if you are making declarations on behalf of UK clients.
This means UK businesses not established in an EU customs territory should request the assignment of the EORI number to the customs authorities of the EU country responsible for the place where they first lodge a customs entry or exit declaration or apply for a decision, see our guide for the information you’ll need to register.
HMRC wants to ensure that traders have access to the right authorisations ahead of 29 March to ensure trade can keep flowing. We will be publishing further information in January 2019 specifically for importers, exporters, carriers, and port operators who trade with the EU through roll-on roll-off locations. This will include new and temporary easements to support continued trade fluidity at these locations.
When using roll-on roll-off (Ro-Ro) transport, for example ships designated to carry wheeled cargo such as lorries, you will need to have information from traders about the goods, in order to pre-notify HMRC of consignments.
If you are going through a roll-on roll-off listed location, where customs formalities cannot be completed on site, you will need to pre-lodge your customs declaration before checking onto the ferry or train on the EU side.
You’ll also need to know transport information from the haulier – for example the registration details of the vehicle and trailer that goods are travelling in – and communicate with them if they need to go to a specific inland location, such as a Designated Export Place for certain exports.
Transit of non-EU goods within the EU
The UK is currently party to the Common Transit Convention (CTC) by virtue of its membership of the EU. Following a successful negotiation, the UK will remain in the CTC after the UK leaves the EU.
As well as retaining its benefits for current users, this will also help trade move freely to and from the UK after leaving the EU. It will provide cash flow benefits to traders and aid trade flow at key points of entry into the UK and exports, as traders will only have to make customs declarations and pay import duties when they arrive at their final destination.
Dealing with import VAT
If the UK leaves the EU without a deal, the government will introduce postponed accounting for import VAT on goods brought into the UK. This means that UK VAT registered businesses importing goods to the UK can account for import VAT on their VAT return, rather than paying import VAT when the goods arrive at the UK border. This will apply to imports from the EU and non-EU countries.
To reach this decision, the government took into account the views of businesses and sought to mitigate any adverse cash-flow impacts and ensure that VAT processes are kept as close as possible to what they are now.
To ensure equity of treatment, in a ‘no deal’ scenario, businesses will be able to account for their import VAT from non-EU countries in the same way, which will help to make the most of trading opportunities around the world.
We’ll issue more guidance setting out further detail on accounting and record keeping requirements soon.
Changes to VAT IT systems
EU VAT registration number validation
This service allows businesses to check whether a customer or supplier’s VAT number is valid. You will still be able to use this service to check the validity of EU business VAT registration numbers. UK VAT registration numbers will no longer be part of this service. In the event of ‘no deal’, HMRC is developing a system that can continue to validate UK VAT numbers. We know this is important for certain businesses in order to carry out due diligence.
Actions you can take now
- Consider any changes you may need to make if you have to follow the same or similar processes to carry goods between the UK and the EU as you do with the rest of the world.
- Assess the impact of an increased demand for safety and security and customs declarations on your business, and consider recruiting and training additional staff.
- The passport rules for travel to most countries in Europe will change if the UK leaves the EU on 29 March 2019 (may also apply to new exit date on 31 December 2020) without a deal. Read the government’s guidance on Travelling to the EU with a UK passport if there’s no Brexit deal and, if relevant, ensure your employees and customers are aware of the potential changes.
- Stay up-to-date with these changes by registering for email alerts. Follow the link, add your email address, select ‘Submit’, select ‘Add subscription’ and choose ‘EU Exit’ then select ‘Submit’.
- Consider checking with your customers that they are aware of the potential changes and how these could impact their business, and suggest they also register for email alerts on GOV.UK.