Customs procedure post-Brexit

Brexit is drawing unstoppably closer, even though the coronavirus pandemic seems to have upstaged it for now. Early next year, however, the UK's withdrawal will hit us with full force. Which is why British experts are trying to shed light on at least the most critical issues of Brexit: VAT and customs duties are to undergo significant changes.

While it is not yet clear whether the representatives of the parties involved will manage to sign a future partnership agreement by the end of the year, it is certain that as from 1 January 2021, the United Kingdom will become a third country for EU member states. Currently three options remain for UK’s final exit: with an agreement, without an agreement or with a temporary agreement that will not be subject to ratification and will temporarily regulate only the most fundamental problems, especially in the customs area.

The introduction of tariffs (customs duties) to trading with the UK will mainly affect small and medium-sized enterprises that have not yet had experience with customs procedures. The first thing to do if trading with the UK is to apply for an EORI number. If you already had a number assigned to you in the UK, you must get a new one, as the old one will expire in January 2021.

The customs procedure itself still remains a great unknown. The UK is trying to make most measures importer-friendly: when importing goods that are not subject to checks, importers from the EU may enter the imported goods in their own records and only attend to customs formalities within six months from the delivery of the goods; the delay will apply to goods imported until the end of June 2021. However, customs declaration cannot be delayed for goods subject to checks: usually commodities subject to excise duty.

If a company registered for VAT in the United Kingdom opts to delay, their obligation to assess import VAT and report it in their tax return shall also be delayed until after all customs formalities are settled.

For the sake of completeness, please note that transactions with the UK will no longer have to be reported in the Intrastat report and in the EC Sales List. This, however, applies only to supplies of goods whose transportation will commence in January 2021. All shipments dispatched or transported in 2020 must still be included in these statements.

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