A business that imports or exports goods, to or from the UK, must register with Revenue for an economic operator registration and identification (EORI) number. In Ireland, it may be applied for by way of a simple process through ROS. The number allocated is usually an extension of the VAT number. It must be applied for. A trader cannot simply use its VAT number with an extension.
The EORI number is a unique registration number valid across the European Union. In principle, only one number should issue. In practice because different revenue authorities may issue them a company may have one EORI number for a principal company and a branch in another jurisdiction. Sometimes duplicate EORI numbers have been allocated in error because the existing number has not been used or declared.
The correspondent GB importer or exporter must register for a UK EORI number with UK Her Majesty’s Revenue and Customs (HMRC). This would be effective only after the effective date of Brexit.
After Brexit UK EORI numbers will not be valid in the EU. The UK will have its own system of the EORI numbers. A person or company exporting to or importing into the United Kingdom which acts as exporter or importer of record must have a UK EORI number.
If the trader is importing on any kind of routine basis then practical convenience will require that it opens a deferred account with Revenue / UK HMRC. This generally offers a one-month deferral and requires to be supported by a guarantee. It appears that both Revenue and HMRC will offer postponed accounting to the next VAT date, with a temporary waiver or period of grace allowed for a guarantee, in particular, if there is a sudden no deal Brexit.
Specific registrations and authorisations with Revenue (or HMRC) are required for the use of particular procedures or beneficial treatment under the customs codes. The customs legislation allows for a range of statuses which can be achieved by operators who meet certain criteria and are effectively given formal trusted status for various purposes. They are mentioned in various contexts where they are relevant.
An ordinary trader commencing to undertake customs processes for the first time may not have sufficient track record, infrastructure, capacity, skill or organisation to achieve the relevant authorisations. Even authorisations that would in principle be beneficial, may not be worth obtaining on a cost-benefit basis, at least initially. It may be that the trader’s customs agent freight forwarder transport operator has the relevant simplifications and authorisations which they can use for the benefit of the trader.
An importer into Ireland should open a deferment account with Revenue in relation to imports where there are customs duties. A deferment account will also be required in relation to Value Added Tax.
An importer into the UK should open an account with HMRC in respect of any liability to UK duty and VAT that might arise.
Below is an extract from Revenue’s website which sets out how to apply for a deferred account for customs duty with Irish Revenue. It requires a comprehensive guarantee in relation to import customs duties. A guarantee may not be required for VAT, at least for a period. It is not clear if and when a guarantee will be required to cover import VAT in the case of Brexit. Existing VAT deferral arrangements in relation to import VAT require a guarantee. Some period of grace may be afforded in the event of a sudden Brexit.
How to apply for a custom deferred payment authorisation
If traders wish to apply for a custom deferred payment authorisation, traders should already be approved for a comprehensive guarantee.
Traders will need your comprehensive guarantee authorisation number before traders can apply for a deferred payment authorisation. Traders should apply for a custom deferred payment authorisation using the Customs Decisions System (CDS).
Traders should also complete a Direct Debit Instruction and upload it on your application on the Customs Decisions System (CDS).
Traders may allow your customs clearance agent to use your deferred payment authorisation on your behalf. If traders wish to do this, traders should also complete the customs clearance agent authorisation.
Sent the completed form to the eCustoms Accounting Unit.
Customs processes and tariffs are commonly identified as the most immediate disruptive effect of Brexit. By themselves, they will cause costs and delays on a number of levels. There will be new processes on every movement of goods across the border between the UK and Ireland. Both an export declaration in one state and import declaration in the other state will be required for each movement.
In theory, each consignment of goods is physically presented to customs for clearance. In practice, most consignments are cleared to proceed without being checked. Technically “presentation” can take place by means of the customs declaration. However, Revenue and HMRC reserve the right to inspect the documents and goods in every case.
Customs procedures apply both on the export side and on the import side. Almost identical data is required to be delivered electronically in the state of export and the state of import. Some additional data is required in the case of imports including in particular calculations of customs/import duties. Generally, checks on documents and on the goods, themselves are much more likely in the case of imports than exports.
Taking the hypothetical example of an Irish export the following sections set out the broad requirements that would apply after the effective date of Brexit. The following standard export and import requirements apply already in international trade out of and into Ireland to or from outside of the European Union. The relevant rules are already in place and would automatically kick in and take effect after the effective Brexit date occurs.
The customs process is now fully computerised and involves one or a number of linked communications of a full set of data with the required information to both HMRC in the UK on the exit side and Revenue in Ireland on the entry side (and vice versa). In practice, all returns are made electronically. Paper returns are provided for in the case of systems failure only.
The export and import returns may be made in advance and this is a requirement in order to secure free movement through the border. Customs returns and processing are largely about risk assessment. Both revenue authorities undertake a computer-based risk assessment of the data.
The import declaration involves approximately 30 to 45 entries on the single administrative document. Historically a one-page document carbonated total of eight copies was used. The return was populated with codes representing the various entries for the information required. The document could be used for both export import and transit purposes various copies of the documents for the relevant parties and authorities.
The electronic export and import declarations are accepted provided that all the required data is input. The return is accepted in 5 to 20 minutes. A form of Single Administrative Document is generated and issues as a pdf from the software and Revenue and HMRC issues a reference number and validates the return.
The customs procedures may be simplified in that the data required will be the minimum consistent with the objectives. However, even minimising what is required is unlikely to avoid the requirement for export and import declarations on every movement across the island (Republic of Ireland)/GB border. The declarations will almost inevitably require the standard information used worldwide and promoted under the World Customs Organisation.
Scope for light touch /simplifications
There is the possibility of some simplification on the UK side possibly for a period. In the context of the no deal planning for the scheduled 2019 exit dates, the UK had announced that it would waive certain aspects of standard customs control at least for a period of adjustment. It published a temporary simplified tariff and proposed to allow GB traders who are not using agents such as customs agents and freight forwarders, to use a very simplified form of customs compliance for a period. Similar measures might be expected again on the UK side at least in the event of a hard no deal exit.
Customs rules are European Union law and the Irish Revenue are bound to implemented. The revenue Commissioners collect duties as agents for the European Union. Most customs duty revenue is paid directly to the European Union as part of its own resources funding. The Irish Revenue Commissioners are subject to audit by the EU commission in relation to compliance obligations which are laid down in EU law.
Because customs rules are EU based, there will not be the same flexibility on the Irish side to put in place short-term fixes and reliefs that may be applied in the UK case in particular in the event of a no deal Brexit. There are considerable flexibilities at various points in the customs code so that there is likely to be light touch treatment for an initial period regardless of whether there is a no deal exit or an exit with some kind of trade agreement in relation to goods.