Preparing your business for Brexit
Now that the UK has left the EU, there will be new rules from 1st January 2021. OrderWise is continually monitoring the latest developments in relation to the ongoing trade negotiations, as well as gathering information from our partners to ensure our software is fully prepared for whatever outcome is reached.
Based on the latest information, the following guidance is likely to apply to all businesses operating within the UK that ship goods to the EU from 1st January 2021, based on a no-deal ‘hard’ Brexit taking place. We will actively update this page as more information becomes available.
VAT and Reporting
- All sales made outside of the UK will be zero-rated for VAT and you will only complete box six on your VAT return. Find more information via the Government website at https://www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012.
- EC Sales Lists will not be required from 1st January 2021. Find more information at https://www.gov.uk/guidance/vat-how-to-report-your-eu-sales.
- Intrastat will no longer be required for exports from 1st January 2021. Find more information, published by the HMRC, at https://www.uktradeinfo.com/news/intrastat-declaration-requirements-for-2021/.
- As a business, you must register for an EORI number if you have not done so already. You can do this at https://www.gov.uk/eori.
- On your customs declarations, please ensure you include your EORI number and VAT registration number.
- You do not need to store your customers’ EORI numbers.
Tips on Customs Procedures
- Goods must be removed from the UK within three months.
- Always obtain official or commercial evidence of the export of your goods, such as sea/air waybills, and keep these for your records.
- Keep supplementary evidence of exportation of goods, such as your customer order/invoice, which will detail the delivery address and date.
- Complete an export declaration. This document contains 44 boxes – it is our recommendation that you utilise a freight forwarder or customs agent to handle this process. For more information, and to find HMRC approved services, please visit https://www.gov.uk/guidance/appoint-someone-to-deal-with-customs-on-your-behalf.
- Intrastat will still be required for all imports from the EU from 1st January 2021.
- Your business must be registered for an EORI number. This is the same number used for exports, so you do not need to register twice.
Postponed VAT accounting
- Import VAT will no longer be paid at the port of entry from 1st January 2021.
- Postponed VAT should post the input tax to Box one and reclaim in Box four, posting the net value of the imports to Box seven.
- It applies to all goods imported to the UK.
- It does not apply to the importation of controlled goods.
- Postponed VAT accounting allows you to declare and recover import VAT on the same VAT return, rather than having to pay it upfront and recover it later.
- For more information, you can visit https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return.
You can find more information at the following locations:
- https://www.gov.uk/transition – The Government website containing comprehensive information on Brexit.
- https://www.avalara.com/vatlive/en/vat-knowledge/brexit.html – Avalara are a team of dedicated tax experts with an extensive information portal on Brexit.