Brexit Business Readiness Weekly Bulletin
Brexit Business Readiness Forum Q&A
8 August 2019
What will happen with VAT deferment at point of entry on EU imports? Currently no VAT due, but I have seen conflicting reports as to what will happen?
In the event the UK leaves the EU without a deal, the government will introduce postponed accounting for import VAT on goods brought into the UK, from both EU and non-EU countries. This means that UK VAT registered businesses importing goods to the UK will be able to simultaneously declare and reclaim import VAT on their VAT returns, rather than paying import VAT on or soon after the time that the goods arrive at the UK border.
Please don’t tell new importers that Duty deferment is effectively a direct debit as businesses are getting confused and not applying for Deferment Numbers thinking they can just pay by DD?
A duty deferment account allows you to pay your customs duties, import VAT and excise duties monthly by direct debit, rather than having to pay immediately each time you clear your goods through customs.
If you have customs duties, excise duties or import VAT to pay, you’ll need to have a duty deferment account to import goods using either:
• transitional simplified procedures
• customs freight simplified procedures
You do not need a deferment account for your import VAT if you’re accounting for it on your VAT Return.
Further information is available at: https://www.gov.uk/guidance/customs-procedures-if-the-uk-leaves-the-eu-without-a-deal#dut-der
Which forms should be completed to apply for a duty deferment account without a CCG.
Information on applying for a duty deferment account is available at: https://www.gov.uk/government/publications/apply-to-defer-payment-of-customs-duties-import-vat-and-excise-duties
Please explain how a shipment that arrives in Calais but destined to Rotterdam. Will that require transit?
Currently, goods that arrive in the EU from outside the EU can either be declared to free circulation in the EU member state of arrival and then travel in free circulation to the final EU member state of destination, or can be declared to a transit procedure on arrival in the first EU member state and travel under the transit procedure to the final EU member state of destination, where the transit procedure is discharged and the goods declared to another customs procedure as appropriate. In the event of the UK leaving the EU without a deal it is expected that EU customs requirements and procedures in (what would then be) the remaining 27 EU member states in respect of imports from outside the EU27 would remain as they are now, but you are advised to check this with the appropriate tax/customs authorities in the EU.
Will TSP cause issues for the collection of trade data for imports?
In the event of the UK leaving the EU without a deal Intrastat will continue to be used to collect data on trade in goods between the EU and the UK.
Are grants for software and customs training being made available again?
The application period for Customs training and IT grants closed on 31/05/2019, and you can no longer apply for these grants. HMRC will continue to review the impact of these grants and its wider support and guidance offer for traders to help them adapt to future customs requirements.
Do you have any recommendations for customs software?
HMRC does not make recommendations in respect of third-party software providers.
Does the EU EORI have to come from the first country of export?
Businesses can obtain an EU EORI from any EU member state. For businesses that are established within the EU, they should request an EORI number from the member state in which they are established.
Those businesses not established in the EU should request an EORI number with the customs authority of the EU member state where they make their first declaration.
Normally, businesses should not hold more than one EORI at a time, as an EU EORI issued by any member state is currently valid across the entire union. However, to help businesses prepare for the UK’s exit from the EU, businesses are able to apply for a UK EORI in addition to their existing EU EORI.
What checks will be done on the driver of goods coming into the UK and will these be done before boarding, on board, on disembarkation?
HMRC will prioritise flow at the border while maintaining security, and will continue to apply an automated, risk based approach to customs checks. This means any increase in the number of checks will be kept to a minimum.
HMRC’s approach to compliance in the event of a no-deal scenario will focus on supporting businesses in meeting their obligations at the border. Any financial penalties applied will be reserved for those who are able to comply but who deliberately choose not to.
This would not change HMRC’s commitment to promoting compliance and tackling avoidance and evasion to support a level and competitive playing field for law abiding UK businesses.
Easement of CCG requirement for Deferment etc.
1. How does this work with companies who already have a CCG in place? Will they be given 100% discount?
2. If I applied today (not D1) would I need a guarantee?
HMRC previously announced it will give importing businesses a period of grace to get a guarantee in place to cover any additional duties that they need to defer. HMRC’s current approach is to deliver the no deal customs, VAT and excise arrangements for 31 October that were in place for 12 April. This means that our expectation is that the previously announced easements will be available to traders should the UK leave the EU without a deal in October for at least as long as previously announced.
After this, a duty deferment account will need to be backed by a guarantee but this will not need to be a CCG. Traders could instead go to their bank to guarantee their duty deferment account without the need for a CCG. HMRC previously announced it will provide 12 months’ notice if the CCG requirement is to be reintroduced.
3. How does CHIEF correlate between TSP and guarantee status?
Guarantee status can be checked by reference to the declarant’s Deferment Account Number entered on the declaration/CHIEF.
4. Also the other procedures – does the same apply?
For at least 12 months after exit, there will be suspension of the mandatory requirement for businesses to provide a guarantee in order to be authorised to declare goods for:
• inward processing procedure;
• outward processing procedure;
• temporary admission procedure;
• authorised use procedure;
• temporary storage; or
• to operate a customs warehouse.
This relates to member in NI and Ireland. When they pick customers work up for processing but that work might go across the Irish border 3/4 times in the course of a day
• We cannot provide specific advice – they may want to speak to an agent
• Inwards and outwards processing may be a good place to start
• A customs agent would be able to provide more specific answers
Easements – and in particular using TSP and is it still, the case that users using TSP will be able to defer submitting supplementary declarations
That is the case for standard goods but we will confirm in regards to controlled goods. HMRC’s current approach is to deliver the no deal customs, VAT and excise arrangements for 31 October that
were in place for 12 April. This means that our expectation is that the previously announced easements will be available to traders should the UK leave the EU without a deal in October for at least as long as previously announced.