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At 12pm CET on 31 December, the UK will leave the EU Customs Union and Single Market. The free movement of goods persons, goods, services and capital between the UK and the EU will end. The trade with the GB (the UK excluding the NI) will be accompanied with customs’ borders, formalities and paperwork including entry and exit summary declarations. Imports will need to comply with EU/UK product rules and be subject to checks and controls for safety, health and other public policy purposes, including all necessary SPS controls applicable between the EU and the UK. Without the trade deal, tariffs and quotas would have also been imposed on trade between the EU and UK. See our website for more information about the trade between the EU and UK after Brexit.
The special rules will apply for trade in goods with the Northern Ireland (NI). NI will remain in the EU Single Market for goods. New checks on movements of goods will emerge between Great Britain (GB) and NI.
The UK revokes the clauses regarding NI of the controversial UK Internal Market Bill.
The HMRC has made some important policy announcements. The rules about distance selling in the NI have finally been published. Additionally, HMRC has changed its policy regarding Duty Deferment Accounts (DDAs) for non-UK businesses.
The distance selling threshold is £70,000.
Businesses making distance sales from EU MSs to NI must register for UK VAT if the value of their distance sales into NI during a calendar year goes over the distance selling threshold. They must keep proper records of their distance sales to NI.
If an annual value of the distance sales into NI is less than the distance selling threshold, the businesses charge VAT at the rate that applies in the EU MS of departure.
They can apply to register for UK VAT as a distance seller voluntarily, even if they do not exceed the threshold.
Existing DDA authorisations held by non-UK established businesses will be rolled over after 2020 and the UK Government will legislate shortly to allow a non-UK business to apply for a new DDA for use in the GB. Non-UK businesses will not be eligible for a guarantee waiver, and will need to provide a financial guarantee from a financial institution that is established in the UK and set up a direct debit.
Traders who import goods from the EU that qualify for delayed declarations will need to have their DDA by the time the supplementary declaration is made, if an intermediary makes their declarations. Supplementary declarations on these goods can be delayed until 1 July 2021.
