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For our latest Brexit VAT & Customs commentary, click here.

For ROI based businesses trading with GB, you will need to have processes in place to deal with Customs procedures and formalities. This is the case irrespective of whether a tariff free FTA is reached or not.

We have set out below key actions relating to Customs & VAT required by businesses before the end of 2020.

VAT & Customs

  1. Understand the potential impact on your supply chain
    Ensure you have reviewed your supply chain to understand the potential impact of a customs and VAT frontier on the movement of your goods including the impact of trading under an FTA. Ensure hauliers and freight forwarders are prepared with the relevant permits and registrations. Be aware that even if an FTA is agreed, it may not cover all goods traded between ROI and GB.
  2. Contracts
    Assess whether the terms of your contracts (especially incoterms) with your suppliers and customers meet your needs post Brexit, in particular who is responsible for import clearance and any duties arising. Incoterms are internationally recognised trade terms that define each party’s obligations, costs and risks associated with the delivery of goods from seller to buyer.
  3. Obtain an EORI number
    To operate within a customs regime, importers and exporters of goods need to be customs registered. If not already registered, an application should be filed with Revenue via Revenue’s Online Service (ROS) for an EORI (Customs) number if you are trading goods between ROI and GB. An EORI number will not be required for supplies on the island of Ireland.
  4. Customs Classification and Origin
    The rate of Duty arising on goods depends on their Customs classification and origin. Ensure you have confirmed the commodity codes and origin for all goods moving into and out of GB and vice versa and you understand the potential tariff implications associated with the movement of your goods between ROI and GB including under an FTA.
  5. Filing Customs declarations
    Irrespective of the outcome of FTA negotiations, reporting for customs will now be required when trading between ROI and GB. Consider how you will file Customs declarations for your export or import of goods. Most declarations are filed by Customs agents/freight companies on behalf of traders. Depending on your profile, you may prefer to bring the declaration process “in-house”. Make sure you understand the information needed to file Customs declarations and where you will get it. For many businesses the required information is not readily available from existing ERP / management information systems.
  6. Importing into the UK
    Ensure you are familiar with the phased plan the UK Government has announced for the introduction of border controls on imports of goods into GB from 1 January 2021 up to July 2021. The measures mean that, for a temporary period from the end of the Transition Period, the filing of UK import declarations and payment of tariffs on EU goods can be delayed. However, as the measures vary between sectors (such as agricultural, alcohol etc.,) it is important to understand which measures relate to your goods and how they impact on your supply chain.
  7. Export/Import Controls
    Understand whether any additional controls will apply to your goods such as licensing requirements, Sanitary and Phytosanitary (SPS) controls or advance notification requirement (e.g. for agri products).
  8. Use of Customs relief/simplifications
    Make sure you are aware of the reliefs and simplifications available such as customs warehousing, inward processing relief, transit which could mitigate the impact of Brexit on your business in ROI or GB. A guarantee is often required to avail of some reliefs so apply early.
  9. Impact on ERP/finance system
    As customs declarations will now be required when trading between ROI and GB, this will have consequences for ERP / finance systems. Assess what changes may be required to your ERP (Enterprise Resource Planning) or finance systems in anticipation of a changed VAT and Customs Duty accounting regime post Brexit.
  10. GB will become a third country for VAT purposes
    The VAT rules for trading goods and services on the Island of Ireland will remain the same but the rules for trade in goods between ROI and Great Britain will change and the rules for the supply of certain services cross border to and from GB will change also. Familiarise yourself with how these new rules will operate and apply to your business. For example, those particularly impacted include sellers of goods B2B into GB from ROI and vice versa and also those supplying goods and certain services B2C from ROI to GB and vice versa. Determine if any additional VAT considerations will arise from your movement of goods post Brexit or your supply of services, e.g. additional VAT registration requirements.

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