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In this blog, our Causeway corporate members RSM Tax & Accounting Limited, offer guidance on the steps you can take now in your business in preparing for Brexit. RSM’s Jim Burberry outlines the VAT and customs duty considerations and how RSM can help.
With now less than 100 days to go until the end of the Brexit transition period on 1 January 2021, recent press reports and statistics from the British Chambers of Commerce suggest that only half of UK firms that trade internationally have considered the impact of Brexit on their business.
Whilst there are still several matters yet to finalised between the EU and UK in regard to Brexit, there are aspects of businesses day to day trading activities in relation to VAT and Customs Duty which we know will bring changes. Ahead of a
Causeway online event hosted by RSM on Brexit on 27 October, this is the first of a number of Brexit ‘countdown’ articles to explain what action businesses can take right now to prepare for Brexit.
One of the changes we know will apply is that there will be border controls introduced by the UK Government from 1 January 2021 which will require customs declarations on goods arriving from the EU. To ease the immediate impact, the controls will be introduced in the UK in three stages taking effect on: 1 January 2021; 1 April 2021; and 1 July 2021. At a very high level, the three stages are as follows:
From 1 January 2021
Businesses importing into the UK 'standard' goods, covering everything from clothes to electronics, will have up to six months to complete full customs declarations and pay duty. However they will be required to keep sufficient records of imported goods to be in a position to make the subsequent declaration.
From 1 April 2021
All products of animal origin and all regulated plants and plant products will also require pre-notification and the relevant health documentation. Animal origin products include meat, pet food, honey, milk or egg products.
From 1 July 2021
From this date, importers in Great Britain will be required to make full customs declarations at the point of importation of goods from the EU and pay relevant tariffs. Additionally, full safety and security declarations will be required.
Critically, all of the above measures only relate to imports of goods into Great Britain from the EU. They do not apply to the flow of goods between Northern Ireland and the Republic of Ireland, or between Northern Ireland and Great Britain. These supply routes are subject to a separate protocol which has its own matters to be finalised.
As you can see from the above, a consequence of Brexit is that UK businesses trading in goods with EU suppliers will need to implement new practices to maintain procurement supply chains.
Right now, RSM recommends businesses engage in dialogue with potential freight and customs agents who may be able to offer a customs declaration service and mitigate the complex administrative burden of customs declarations.
RSM is seeing huge amounts of variation amongst businesses in terms of the time and resource they are committing and the level of detail in their planning. To support these businesses, RSM has developed a comprehensive portfolio of tools to ensure that businesses can take a rigorous and structured approach to their preparations and identify the appropriate strategy for the business.
If your business would like to discuss how RSM can assist in more detail, please contact Jim Burberry: jim.burberry@rsmuk.com or Patrick Norris: patrick.norris@rsmuk.com
If you would like to find out more about RSM’s practical approach to preparing for Brexit, we are running an online Brexit presentation with Jim and his colleagues from the UK and Ireland at 4pm on Tuesday 27 October - REGISTER HERE >