Brexit: VAT & Customs Services
The current rules governing indirect tax (VAT and Customs duty) have been in place for nearly 30 years and so many businesses have no experience of trading outside of the EU. Therefore, many businesses may have a steep, and potentially costly learning curve to prepare for the new, potentially dramatic, change in trading conditions.
Shrewd businesses will be responding to the challenges of Brexit in a proactive rather than a reactive way and may be reviewing their contracts, supply chains and commercial structures to reduce the impact of both VAT & Customs duties.
Dains can support businesses considering their strategies for dealing with the indirect tax aspects of a no-deal Brexit; helping to smooth the transition. We have outlined some of the areas we can assist you with below:
Importing and exporting
If you are importing or exporting goods from the UK, then there are both opportunities and obstacles.
There is a significant amount of paperwork to complete to comply with the rules for both importing and exporting goods. We can advise you as to the processes and procedures you should follow and the simplifications which may apply.
We can also advise you with regards to the special procedures which can enable you to mitigate customs duties, ensuring that your supplies remain commercially viable.
Classification and customs procedures
All goods must be classified when they are imported or exported.
Post Brexit there will be two Tariffs which UK Businesses will need to consider; the UK Global Tariff and the Comprehensive Tariff which applies to the rest of the world.
The Comprehensive Tariff has about 12,000 different tariff codes and it is essential that you use the correct one or penalties can be imposed – and these can be as high as three times the value of the goods being imported or exported
If you use different items that are imported and make them into a single product, different tariffs may apply.
Duty can be paid on the same item more than once if the incorrect procedure code is used at Importation.
We can assist you in finding the correct tariff and procedure code for the items you import or export.
Binding Tariff Information (BTI)
It is possible to agree a Tariff for a product with the Customs authority. A BTI will endure for 3 years after agreement. Holding a BTI gives you several advantages. The decision is legally binding on all customs administrations within the EU. It ensures uniform application of the legislation on tariff classification.
We can assist you in applying for a BTI if appropriate.
Inward Processing Relief (“IPR”)
Businesses which import goods to process before re-exporting or putting finished product into free circulation within the UK can avoid or reduce a VAT and duty cost by being authorised to use IPR. We can work with you to identify the potential benefits of IPR and assist you with the authorisation process and check the declaration that must be made to HMRC once the process has been completed.
Outward Processing Relief (OPR)
Similarly, businesses sending goods overseas for manufacture or assembly and return to stock can apply to use OPR which avoids the imposition of duty.
We can work with you to identify the cost/benefits of OPR and assist with implementation.
Customs duty and VAT can be postponed on the importation of goods through the use of customs warehousing as the payment of duty and VAT will be deferred until the goods are removed from the warehouse (whether physical or virtual – controlled by software). If goods are re-exported, the use of a warehouse can relieve the charges entirely, producing real cash savings.
Customs warehousing must be used with IPR and/or OPR.
We can assist businesses in evaluating the costs/benefits of a warehouse, assist with implementation and undertake regular assurance checks to ensure compliance.
If goods are only brought into the UK or other EU country for a short while, duty and VAT relief is available.
If you are temporarily moving goods, for example, if you are a touring band or have samples, then you can apply for an ATA Carnet. This enable you to remove the goods and return them without having to pay VAT and duty. We can assist with this.
If you are moving goods from the UK across Europe, it is possible to suspend the payment of Customs Duty and other charges until they reach their destination by using transit procedures.
We can help you to identify which procedure works best for you and how to apply.
No matter how well you plan, mistakes sometimes happen you may find yourself in dispute with HMRC or Customs officials in other countries.
We are experienced in handling such disputes for clients and have an international network which can provide this service in other territories.
AEO approval is, in effect, a kite-mark for a business. It demonstrates that the business has a high level of Customs compliance. Applying for AEO status can be a time-consuming process but may be worth considering as the UK leaves the EU as it may facilitate trading across Europe.
We can help you to evaluate whether there could be a benefit in achieving AEO status and assist with achieving approval.
We are an approved HMRC trainer and can provide bespoke training for businesses trading with European customers and suppliers. Currently, the training is grant funded and is supplied at no cost to the business. Please contact us for more information.
We operate a helpline for ad hoc customs and VAT queries.
We would welcome the opportunity to talk to you about your business and how it is responding to the changes which will be introduced by Brexit. Please contact us to arrange an initial free of charge meeting to explore your options.
We would welcome the opportunity to discuss your needs with you. For a free introductory discussion please contact Terri Bruce tel: 07929 186391 or complete our enquiry form and we will get back to you.