VAT-registered businesses told to prepare for Brexit trading changes

HMRC has written to all VAT-registered businesses in Great Britain who trade with the EU and/or the rest of the world. The letters highlight what they need to do to prepare for the UK’s exit from the EU at the end of this year.

The letters point out that the actions required to ensure they can continue trading from 1 January 2021 will not change. Regardless of the outcome of the government’s current negotiations with the EU.

From 1 January 2021, the UK will operate a full, external border with the EU. This means that there will be controls placed on the movement of goods between Great Britain and the EU.

This means that from that date, VAT -registered businesses need to submit declarations when importing and exporting goods that are categorised as ‘controlled’. Import processes for non-controlled goods will be introduced in 3 stages: January, April and July.

The letters explain what businesses need to do to prepare for the new processes for moving goods between Great Britain and the EU.

This includes making sure they have a UK economic operator registration and identification (EORI) number, deciding how they will make customs declarations, and checking if their imported goods are eligible for staged import controls.

Most traders with a good compliance record will be able to defer import declarations on most goods for up to six months after 1 January 2021.

From 1 January 2021, businesses will be able to use postponed VAT accounting to account for import VAT on their VAT return for goods imported from anywhere in the world.

Import VAT will not be due at the border if goods in a consignment do not exceed £135 in value. The only exceptions will be excise goods and gifts.

HMRC will issue further guidance over the coming months.

Read our other news on our website

Subscribe to our Newsletter

Keep Up-to-date with the latest TAX And Accountancy news

Limited company Formation

From AJR & Co Ltd