Just in case a Brexit deal can’t be reached with the EU by 29 March 2019, HMRC has issued its first set of notes on the Customs & VAT implications. Surely this is evidence a ‘no deal’ is a real possibility.
Below is a summary of the key points that might affect you. You can find the government guidance here. And if you have any questions about any of the below, please get in touch with our VAT Head Honcho, Damian Shirley.
- Additional reporting requirements – Businesses will need to develop and expand their customs knowledge – particularly if you’ve only previously purchased/sold within the EU. You’ll need to consider which are the correct Incoterms to use and report.
- Future tariff impacts –The MFN (most favoured nation) rates will be applicable for trade between the EU and the UK. However, the UK may choose to apply new duty rates that differ to the EU. The UK intends to continue offering unilateral preferences to developing countries and to transition all existing EU free trade agreements (FTAs). By omission, this means exporters using FTAs may lose the preferential treatment.
- Export controls – There are significant changes to export controls particularly around the licensing of dual-use goods. This may require businesses to reregister within both the EU and UK.
- Trade between Northern Ireland and the Republic of Ireland – The UK Government states that it will be working on a solution with the EU, which hopefully means no hard border!
- Exports – UK businesses will need to plan for customs and VAT processes in relation to exports to EU businesses, which will be checked at the EU border and subject to local country rules.
That’s it for now. As we mentioned above, if you have any questions about any of the below, please feel free to get in touch. You can also find the government guidance here.
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