Preparing for No Deal – What should I be doing?

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The UK triggered Article 50 of the Treaty of the European Union on 29 March 2017. The UK then had two years to negotiate a Withdrawal Agreement and framework for a future relationship with the EU before the point of the UK’s exit from the EU at 11pm GMT on 29 March 2019.
In the event of no deal, where the UK leaves the EU and becomes a third country on 29 March 2019 the UK government has published a number of technical notices to cover scenarios where there is no UK-EU agreement in place on exit day.

Following questions from a number of our clients we have summarised the main questions and the Government current advice. Altion Law specialises in HMRC disputes, to make a free enquiry, call us today on 01908 414990, email us or complete our free enquiry request for a free, confidential and no obligation discussion and let one of our expert team discuss your situation and the options available to you.

Will My Driving Licence Still Allow Me To Drive In The EU?

Your driving licence may no longer be valid by itself when driving in the EU and you may need to obtain an International Driving Permit (IDP) to drive in the EU. An IDP is a document which when carried with your driving licence means you would be able to drive outside of the UK including in EU countries. This would apply to whether you’re driving in a private or professional capacity. Those companies who use hauliers in their supply chain may wish to check what preparations have taken place prior to March 2019. From 1 February 2019, the government will begin providing IDPs. From this date, you will be able to apply for both 1949 and 1968 types of IDP at 2,500 Post Offices across the UK. The government will announce which Post Office branches will offer IDPs in early 2019.

Read the full notice here.

What Happens To Commercial Road Haulage In The EU?

UK hauliers could no longer rely on automatic recognition by the EU of UK-issued Community Licences. Hauliers may therefore no longer be able to access EU markets with their Community Licence alone. UK hauliers will be able to use ECMT permits if there is no deal. ECMT permits can be used for different vehicles at different times but must be carried in a vehicle whilst it is making an international journey. The permit allows transit (though this is restricted in Italy, Austria, Hungary, Greece and Russia) and allows cross trade. ECMT permits will be available to enable journeys to the EU, but these are limited in number. ECMT permits will be allocated and issued to successful applicants at the end of 2018 and so you should check with any haulage partners as to what their preparation plans are.

Read the full notice here.

How Do I Import Goods After 29th March 2019?

Businesses importing goods from the EU will be required to follow customs procedures in the same way that they currently do when importing goods from a country outside the EU. This means that for goods entering the UK from the EU an import declaration will be required, customs checks may be carried out and any customs duties must be paid.

Before importing goods from the EU, a business will need to:

Register for an UK Economic Operator Registration and Identification (EORI) number.
Ensure their contracts and International Terms and Conditions of Service (INCOTERMS) reflect that they are now an importer
Consider how you will submit import declarations, Engaging a customs broker or acquiring the appropriate software and authorisations form HMRC will come at a cost.
Decide the correct classification and value of your goods and enter this on the customs declaration. HMRC publishes tariff information and guidance alongside the list of commodity codes needed to classify goods together with all the tariff rates, and measures.

When importing goods from the EU, a business will need to:

Make sure that their carrier has submitted an Entry Summary Declaration at the appropriate time
Have a valid EORI number
Submit an import declaration to HMRC using their software, or get your customs broker, freight forwarder or logistics provider to do this for you.
Pay Value Added Tax (VAT) and import duties including excise duty on excise goods unless the goods are entered in duty suspension. Import VAT may also be due and more information regarding this is in a later question.
Businesses may also need to apply for an import licence or provide supporting documentation to import specific types of goods into the UK, or to meet the conditions of the relevant customs import procedure.

Read the full notice here.

How Do I Export Goods After 29th March 2019?

Before exporting goods to the EU, a business will need to:

Register for an UK Economic Operator Registration and Identification (EORI) number.
Ensure their contracts and International Terms and Conditions of Service (INCOTERMS) reflect that they are now an importer
Consider how you will submit import declarations, Engaging a customs broker or acquiring the appropriate software and authorisations form HMRC will come at a cost.

When exporting good to the EU, a business will need to:

Have a valid EORI number
Submit an export declaration to HMRC.The export declaration may need to be lodged in advance so that permission to export is granted before the goods leave the UK.
Businesses may also need to apply for an export licence or provide supporting documentation to export specific types of goods from the UK, or to meet the conditions of the relevant customs export procedure.
When exporting duty suspended excise goods to the EU, a business will still need to continue to use EMCS to record the duty suspended movement from a UK warehouse or premises to the port of export.

Read the full notice here.

What Happens To VAT After 29th March 2019?

Vat is staying. The revenue that VAT provides is vital for funding public services. The VAT rules relating to UK domestic transactions will continue to apply to businesses as they do now.

VAT on imported goods from the EU:
The government will introduce postponed accounting for import VAT on goods brought into the UK. This means that UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, rather than paying import VAT on or soon after the time that the goods arrive at the UK border. This will apply both to imports from the EU and non-EU countries.
Businesses importing goods will be able to account for their import VAT from non-EU countries in the same way, which will help UK businesses make the most of trading opportunities around the world. Customs declarations and the payment of any other duties will still be required. More guidance setting out further detail on accounting and record keeping requirements will be issued by the government in due course.

VAT on Exported goods to the EU:
VAT registered UK businesses will continue to be able to zero-rate sales of goods to EU businesses but will not be required to complete EC sales lists.
As UK VAT registered businesses will not be required to complete an EC sales list, there will be changes to how these sales are recorded. Those UK businesses exporting goods to EU businesses will need to retain evidence to prove that goods have left the UK, to support the zero-rating of the supply. Most businesses already maintain this evidence as part of current processes and the required evidence will be similar to that currently required for exports to non-EU countries with any differences to be communicated in due course.
Current EU rules would mean that EU member states will treat goods entering the EU from the UK in the same way as goods entering from other non-EU countries with associated import VAT and customs duties due when the goods arrive into the EU. Individual EU member states may have different rules for import VAT for non-EU countries and import VAT payments may be due at the border when importing goods. UK businesses should check the relevant import VAT rules in the EU Member State concerned.

Place of supply rules for UK businesses supplying services into the EU:
The main VAT ‘place of supply’ rules will remain broadly the same for UK businesses.
For UK businesses supplying digital services to non-business customers in the EU the ‘place of supply’ will continue to be where the customer resides. VAT on services will be due in the EU Member State within which the customer is a resident.
For UK businesses supplying insurance and financial services, if the UK leaves the EU without an agreement, input VAT deduction rules for financial services supplied to the EU may be changed. The government will update businesses with more information in due course.

Read the full notice here.

Altion Law specialises in HMRC disputes, to make a free enquiry, call us today on 01908 414990, email us or complete our free enquiry request for a free, confidential and no obligation discussion and let one of our expert team discuss your situation and the options available to you.