FINANCE
The news, as we paused work to enjoy a Christmas lockdown, was that the UK had agreed a zero import taxes deal with the EU. Businesses that had taken the view to await the outcome of the deal breathed a huge sigh of relief and settled down for a quiet Christmas in the knowledge that all would return to normal. By Rupert Moyle
INDIRECT TAX CHANGES POST BREXIT But were they right? Has the “Trade and Cooperation Agreement” (TCA) brought normality back to the UK? Are there zero import taxes? The simple answer to each question is no. So, what are the main changes?
CUSTOMS BORDERS
The major change for movements of goods between the UK and EU is that there are customs border controls. Goods no longer move freely. Export and import declarations are required and import VAT (and perhaps duty) needs to be paid. n T he UK has allowed approved importers the option of delaying declarations from January 1st to June 30th 2021 by between three and six months. They will still have to file declarations and pay the taxes though after the deadline. n The EU offers no simplified procedures for imports.
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POSTPONED IMPORT VAT ACCOUNTING (PVA)
PVA allows a UK VAT registered impor ter to elect on its impor t declaration to pay and claim (subject to the normal rules) its import VAT via its UK VAT return rather than at the port. This can be used for all UK imports, not just from the EU, helping with cashflow.
INCOTERMS
Shipping terms, or “Incoterms”, are yet more impor tant. They determine whether the supplier or customer is responsible for the import declaration and for paying the VAT and any duty.
CLEARING CUSTOMS – EXPORT AND IMPORT
UK businesses may need more than just a UK “EORI” number to clear goods through customs. A UK EORI only works for UK imports or exports, not for EU and Northern Ireland customs clearances. A further EORI and also VAT registrations may be required if UK suppliers are responsible for imports into the EU for example. Another issue which is already giving problems at EU ports concerns the EU’s Union Customs Code (UCC), which determines who can be the
❛❛ But were they right? Has the
‘Trade and Cooperation Agreement’ (TCA) brought normality back to the UK? Are there zero import taxes? ❜❜
