This article was originally published on 22 December, and updated on 28 December.
Access the previous version here.
For NI based businesses trading with GB, you will need to have processes in place to deal with Customs procedures and formalities, write Johnny Hanna and Frankie Devlin of our Brexit Response team.
This is still the case following the UK-EU Trade and Cooperation Agreement (TCA). We have set out below key actions relating to Customs & VAT required by businesses before the end of 2020.
1. Understand the potential impact on your supply chain
Ensure you have reviewed your supply chain to understand the potential impact of a customs and VAT frontier on the movement of your goods.
Assess whether the terms of your contracts (especially incoterms) with your suppliers and customers meet your needs post transition. In particular, who is responsible for import clearance and any duties arising.
3. Obtain an EORI number
To operate within a customs regime, importers and exporters of goods need to be customs registered. If not already registered, an application should be filed with HMRC to obtain an XI EORI (Customs) number if you are trading goods between GB and NI. If registered with the Trader Support Service (TSS) an XI EORI should be issued automatically to NI businesses.
4. Customs Classification and Origin
The rate of Duty arising on goods depends on their Customs classification and origin.
The EU-UK TCA provides for tariff free imports of “qualifying goods” traded between the EU and UK (including NI) of EU and UK origin. For goods imported from GB and considered “at risk” of moving into the EU, ensure you have confirmed the commodity codes, determine if your products meet the origin tests to qualify for a zero tariff and familiarise yourself with the process for supplier statements of origin status for all goods moving into NI from both GB and ROW countries.
5. Filing Customs declarations
Register for the Trader Support Service (TSS)
With effect from 1 January 2021, reporting for customs will now be required when moving goods into NI from GB and ROW. Consider how you will file Customs declarations for the import of goods – register for the TSS which will assist with declaration submission.
6. Register for the UK Trader Scheme
Trusted trader scheme
Register for the newly announced UK trusted Trader Scheme before 31 December 2020 which is available to businesses with an NI establishment who may be able to declare that the goods it receives in NI from GB and ROW are not “at risk” of moving into the EU so that an EU tariff is not payable. Check the criteria and process for declaring when goods are not “at risk” and also whether your business may be eligible to claim a waiver from EU tariffs (if applicable).
7. Export/Import Controls
Understand whether any additional controls will apply to your goods such as licensing requirements, Sanitary and Phytosanitary (SPS) controls or advance notification requirement (e.g. for agri-products).
8. Use of Customs relief/simplifications
Make sure you are aware of the reliefs and simplifications available such as customs warehousing, inward processing relief, transit, which could mitigate the impact of Brexit on your business in NI, ROI and GB, in particular in non-transit cases where the goods do not qualify as being of UK or EU origin.
9. Impact on ERP/finance system
As customs declarations will now be required when trading between GB and NI, this will have consequences for ERP / finance systems. Assess what changes may be required to your ERP (Enterprise Resource Planning) or finance systems.
10. GB will become a third country for VAT purposes
The VAT rules for trading goods on the Island of Ireland will remain the same but the rules for trade in goods between NI and GB will change. NI will follow UK VAT rules for services and the rules for the supply of certain services cross border to and from the whole of the UK (including NI) and ROI will change. Familiarise yourself with how these new rules will operate and apply to your business. Have a look at our recent VAT article (available to view here) and VAT webinar (available here).
Get in touch
If you have any queries on how Brexit will affect your business, please get in touch with our dedicated Brexit response team.
KPMG in Northern Ireland
Partner, Indirect Taxes – VAT & Customs
KPMG in Ireland