Key Preparations for Traders After Brexit Transition Period
Posted on 25th July 2024 at 13:53
As the Brexit transition period draws to a close, UK businesses engaged in trade must take critical steps to adapt to the new regulatory environment. The departure from the EU brings a range of changes, particularly concerning customs procedures and VAT regulations. Below are key preparations traders should make to navigate this transition smoothly:
1. Understanding EU Border Requirements
Businesses involved in supply chains should familiarize themselves with the new EU border requirements. This includes learning about procedures and gaining access to relevant EU or member state systems. This knowledge will be essential for complying with the new regulations and ensuring the smooth movement of goods.
2. Obtaining EORI Numbers
Great Britain EORI Number: All businesses trading with the EU will need a Great Britain Economic Operators Registration and Identification (EORI) number. This registration is essential for customs processes and can be obtained online.
EU EORI Number: UK businesses conducting certain operations in the EU, like customs declarations, may also need an EU EORI number.
3. Customs Intermediaries
With new customs controls, many businesses will need the assistance of customs intermediaries. These professionals can help navigate the complexities of customs declarations and compliance with both UK and EU regulations. Without intermediaries, businesses must invest in HMRC-approved software and manage declarations independently.
4. Duty Deferment Accounts (DDA)
Businesses that frequently import goods may benefit from setting up a Duty Deferment Account. This account consolidates various customs charges into a single monthly payment, streamlining the financial aspect of imports. Authorization from HMRC is required to set up a DDA.
5. VAT Considerations
Postponed VAT Accounting: VAT-registered businesses completing full customs declarations can opt to use postponed VAT accounting. This allows import VAT to be accounted for on the VAT return rather than at the point of entry.
Transactions Under £135: For imports valued at less than £135, the responsibility for VAT shifts from import VAT to supply VAT, changing the point at which VAT is collected.
Non-VAT Registered Businesses: These businesses, including those not using postponed VAT accounting, must report and pay import VAT through customs processes. A DDA can also be used to defer VAT payments.
6. Employee Preparation
Businesses should ensure that all necessary documentation is in place for employees, such as international driving permits for drivers. This preparation will help avoid disruptions in operations post-Brexit.
7. Review of Commercial Contracts
The transition may affect existing commercial contracts, especially those involving international trade. Employers should review Incoterms rules, as these international commercial terms define responsibilities between buyers and sellers.
As the deadline approaches, the UK government is expected to provide further guidance, which will be crucial for businesses to understand and implement these changes effectively. It's advisable for businesses to stay informed and consult with experts to ensure compliance and smooth operations in the post-Brexit landscape.
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