For NI based businesses trading with GB, you will need to have processes in place to deal with Customs procedures and formalities.
This is still the case following the UK-EU Trade and Cooperation Agreement (TCA). We have set out below key actions relating to Customs & VAT required by businesses.
Ensure you have reviewed your supply chain to understand the potential impact of a customs and VAT frontier on the movement of your goods.
Assess whether the terms of your contracts (especially incoterms) with your suppliers and customers meet your needs post transition. In particular, who is responsible for import clearance and any duties arising.
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 HMRC to obtain an XI EORI (Customs) number if you are trading goods between GB and NI. If registered with the Trader Support Service (TSS) an XI EORI should be issued automatically to NI businesses.
The rate of Duty arising on goods depends on their Customs classification and origin.
The EU-UK TCA provides for tariff free imports of “qualifying goods” traded between the EU and UK (including NI) of EU and UK origin. For goods imported from GB and considered “at risk” of moving into the EU, ensure you have confirmed the commodity codes and check if the EU tariff rate is zero or not and also determine if your products meet the origin tests to qualify for a preferential zero tariff under the TCA on import into NI and familiarise yourself with the process for supplier statements of origin status for all goods moving into NI from both GB and ROW countries.
With effect from 1 January 2021, reporting for customs is now required when moving goods into NI from GB and ROW. Consider how you will file Customs declarations for the import of goods – register for the TSS which will assist with declaration submission.
Register for the newly announced UK trusted Trader Scheme before the end of February 2021. This is available to businesses with an NI establishment who may be able to declare that the goods it receives in NI from GB and ROW are not “at risk” of moving into the EU so that an EU tariff is not payable (note there is also a temporary easement for GB businesses to access the Scheme where they supply to an NI business that is eligible for the Scheme). Check the criteria and process for declaring when goods are not “at risk” and also whether your business may be eligible to claim a waiver from EU tariffs (if applicable).
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). Understand when any grace periods will come to an end.
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 NI, ROI and GB, in particular in non-transit cases where the goods do not qualify as being of UK or EU origin.
As customs declarations will now be required when trading between GB and NI, this will have consequences for ERP / finance systems. Assess what changes may be required to your ERP (Enterprise Resource Planning) or finance systems.
The VAT rules for trading goods on the Island of Ireland will remain the same but the rules for trade in goods between NI and GB will change. NI will follow UK VAT rules for services and the rules for the supply of certain services cross border to and from the whole of the UK (including NI) and ROI will change. Familiarise yourself with how these new rules will operate and apply to your business. Have a look at our recent VAT article (available to view here) and VAT webinar (available here).
If you have any queries on how Brexit will affect your business, please get in touch with our dedicated Brexit Response Team.