An Irish exporter may be in a position to complete export declarations with Irish Revenue. Revenue may accept his declaration. An exit notice must be given in the declaration or at before approaching the border. In most cases, Revenue will not usually intervene in relation to exports, although some policing and verification will be required to vouch that the goods which have been declared in fact correspond with those that are crossing the border.
However, in order to achieve a free “straight-through” the port roll on roll off movement to the UK, there must also be a UK established importer who makes a UK import declaration, paying or securing the VAT, any customs duty or other requirements that apply. This must be done in advance so that the lorry can move out to Irish export customs control and in true UK export customs control.
This presupposes that the customer has the ability and can take on this process, from a costs perspective. There will be many cases where the UK buyer is prepared to act as the importer of record. It may have no alternative. However, where there are alternatives, such as a UK supplier, it may be more convenient and efficient to use them. The Irish exporter may find that its business can no longer compete on the new terms.
Temporary Simplified UK import side
The transitional simplified procedures allow a simplified declaration by entry in the trader s records.
The information should include:
- the date and time the goods arrived in the UK
- a description of the goods and the commodity code and the quantity imported
- purchase and (if available) sales invoice numbers
- the customs value
- the serial numbers (if appropriate)
- delivery details
- supplier emails
After you’ve imported the goods:
- you’ll need to send a supplementary declaration by the fourth working day of the month following the arrival of the goods into the UK
- HMRC will take the trader ’s direct debit on the 15th day of the month after the goods arrive in the UK if the trader has duties or taxes to pay
As indicated, it is necessary to separately register for this procedure. We believe it would be useful if the trader ’s UK sister company did so, even if does not ultimately use it. A financial guarantee is required to cover duty, but it appears that a couple of months grace will be given by HMRC in this regard. The trader should check the HMRC in this regard as the position is subject to change.
If the simplified frontier declaration is made by making an entry in the trader ’s records the trader ’s EORI must be given to the haulier and may be requested by UK Border Force. The trader must update records to show the date and approximate time when goods arrive. It is not necessary to notify HMRC about the arrival at role on roll off locations under the transitional procedure.
After importation, a supplementary declaration is required by the fourth working day of the month following the arrival of the goods in the UK. This is entered in the trader ’s records.
The transitional simplified procedure does require a return to HMRC in the case of controlled goods. It would appear however that the trader ’s goods are not controlled goods, but the trader should consider whether there is anything which might be subject to special controls. The list is at this link. https://www.gov.uk/guidance/list-of-controlled-goods-for-transitional-simplified-procedures
Standard UK Import Procedure
If the UK importer do not use the transitional simplified procedure the following procedure applies in the UK. Some Irish software providers provide a UK module. Some argue that having completed the Irish export declaration completion of the full UK procedure would not have been much more onerous than the standard import process. It would also avoid compliance questions on an HMRC audit. It avoids having to keep records under the transitional simplified procedure.
It will be necessary to obtain transport information from the haulier/logistics provider including the vehicle registration number and the trader /container number. The customs declaration must be made in advance of the logistics provider/carrier checking the goods onto the ferry on the Irish side.
The UK customs system (formerly CHIEF changing to the customs declaration service in 2019/20 (CDS) issues a movement reference number or entry number. This must be given to the logistics provider confirmed the declaration has been pre-lodged. It may be requested by Border Force.
When goods arrive in the UK the trader must update the status. Some goods must be updated instantly and there is a list of them on the UK HMRC website. The trader is obliged to provide an arrival notification showing the goods are available for customs presentation if required. Duty may become due at that point.
The EU customs code and the new UK customs code which effectively replicates it requires that a business that makes declarations whether export or import declarations, must be established within that jurisdiction. This requires a presence such as a company or a branch in the other state which acts as the importer of record. The alternative is an agent who takes full responsibility for the customs obligations and duty. This is feasible in low-value cases, but an agent is unlikely to take responsibility in the case of substantial cases.
A subsidiary or permanent establishment means having a sufficient presence to effectively act as an importer and distributor. The subsidiary or permanent establishment of a branch would itself be subject to UK corporation tax on its profits. It would have to have a registered office and at least a sufficient presence to comply with its companies, tax and other regulatory obligations. A guarantee would be required, in the short term, although a period of grace may be afforded for a short period.
An alternative is that an agent takes full customs responsibility. Unsurprisingly most agents do not wish to take on actual responsibility for the trader’s tax liability. There are some limited exceptions such as postal consignments for which there is a special regime.
Parcel couriers/ carriers may effectively act as a customs agent, may be willing to act as agents, on lower risk and small value subject to having complete assurance by way of appropriate security or an established relationship with a reputable and trustworthy trader.
In consumer cases, postal arrangements or parcel couriers may be willing to act as agent for the importer. However additional costs will arise.
For other businesses, the only way to ensure continuity of supply if the buyer is unable or unwilling to undertake customs processes or find an agent who will take full tax responsibility may be constrained to sell through a UK established distributor or establish a UK subsidiary or permanent establishment. Needless to say, this involves additional costs and resources, which may not be feasible and economical in all cases.
Brexit would change the VAT position. VAT must always be paid or accounted for at the point of entry. It is collected through the customs system,, even where there is no customs duty (which is likely to be the case on all or most goods after a trade agreement.
In business to business sales, VAT will arise immediately at the point of import whether into the United Kingdom or Ireland. Ireland and the United Kingdom have announced a new VAT deferral scheme, by which the date for payment of VAT be deferred until the next VAT date, for a VAT registered buyer.
The registration threshold is £85,000 in the UK. However, importers in business may need to register for VAT voluntarily to claim a postponement of VAT. The existing VAT information exchange system which facilitates the sale of goods and supply of services within the EU on an integrated and smooth basis will cease to apply.
The usual guarantee that would be required in the circumstances in order to defer VAT may not be required for a period. However, the guarantee would be required, A guarantee requires either a cash bond or effectively, a facility from an established credit institution up to the maximum liability that is required by the customs rules.
Private Non-VAT Registered UK Buyers
The existing EU arrangements by which Irish VAT might be charged within certain thresholds by distance sellers to consumers and sub-VAY buyers would no longer apply. Either the customer must pay the VAT or the Irish exporter’s UK distributor or entity acts as importer and sells to cconsumers in the UK. In the latter case, it will be required to register for UK VAT sales, collect and pay it to UK Revenue HMRC)s.
Where the buyers are private individuals such as consumers (and in some cases sub-VAT level traders) could not realistically be expected to complete customs and VAT obligations. Prior to the effective date of Brexit cross-border sales to private individuals in the EU are subject to present to distance selling arrangements within the EU including special VAT requirements discussed in other sections.
In some cases, Irish traders selling to consumers / non- VAT registered impoters may shoose to rely on the postal system which provides special inbuilt customs procedures or on parcel couriers which typically enjoy customs simplifications. For sales with value less than £135, there is generally no customs duty and there is a special mechanism whereby the Irish exporter can register for UK VAT for this purpose only. Otherwise, the Royal Mail or parcel courier must collect VAT and customs duty where applicable.
Above this threshold and below €1,000 simplified postal customs forms can be used, Royal Mail or other postal services would be required to collect the VAT and customs duty before releasing the parcel. Equally parcel couriers would generally require to collect VAT and customs duty. Parcel couriers may offer a service whereby goods are delivered duty paid at the exporter’s expense