Imports and Exports
The UK/EU withdrawal agreement expires at 11pm GMT on 31 December 2020. After that date, the UK will become a separate customs territory from the EU. This means that from 1 January 2021, all imports and exports of goods to and from the EU will become subject to customs procedures, both in respect of EU goods imported into the UK and UK goods exported to the EU.
Economic Operators Registration and Identification Number (EOIR)
Every business will need an Economic Operators Registration and Identification (EORI) number to transit goods between the UK and non-EU countries from January 1, and may also need one if moving goods to or from Northern Ireland. Not having an EORI means increased costs and delays; if HMRC cannot clear your goods you may have to pay storage fees. It can take up to a week to get one in some cases – if your business does not have an EORI number, you can get one by applying to HMRC.
Duty Deferment Accounts
The basic rules of customs are that imported goods need to be declared, and any duties paid (which could include VAT, customs and excise duties), at the time of importation. However, traders who import goods regularly may benefit from having a “duty deferment account” (DDA). This enables customs charges including customs duty, excise duty, and import VAT to be paid once a month through Direct Debit instead of being paid on individual consignments. With effect from 1 January 2021, VAT registered traders can account for import VAT on their VAT return using postponed VAT accounting. To set up a DDA, traders, or their representatives, apply for a deferment account number (DAN) and will need to be authorised by HMRC.
A range of government guidance has been provided by both the UK government and the European Commission for entities that trade between the UK and the EU-27: