Life is now very much more complicated for businesses that need to import or export goods to or from the EU, or transfer goods into Northern Ireland.
Although there are few tariffs to pay on goods moving across borders there is import VAT, and possibly customs duties to pay. To keep track of the goods through the border control computer system, each business that sends or receives goods across the border needs an Economic Operator Registration and Identification (EORI) number.
It is easy to apply for an EORI number, it takes about 10 minutes and businesses do not have to pay for it, or pay someone else to do the EORI registration for them. A complication for UK businesses is that if they move goods into or out of Northern Ireland, they need to already have an EORI number that starts with GB, and then apply for a second EORI number that starts with XI. That is two different EORI numbers, not the same number with the pre-fix changed.
Where the trader is moving goods between Great Britain and Northern Ireland they should sign up for the Trader Support Service, which is designed to help businesses cope with the Customs and VAT border which now exists in the Irish Sea.
Businesses that import goods would normally have to pay import VAT on arrival before those goods can be released from the port. However, HMRC has agreed that this import VAT can be paid as part of the normal quarterly VAT return under the Postponed VAT Accounting (PVA) system.
The importer doesn’t have to use PVA, but it helps with cash flow if they do. To receive statements from HMRC on the amount of import VAT that has been postponed, and which needs to be reported on the VAT return, the trader also needs to register for the Customs Declaration Service (CDS).
Brexit was supposed to remove red-tape.Written by the Tax Advice Network