Preparing for the end of the Brexit transitional period.

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In this post we cover some practical steps that businesses can take to ensure they are prepared for the end of the Brexit transitional period. 

The UK will leave the EU VAT Territory on 31 December 2020. After this date, Great Britain (England, Wales and Scotland) will not be subject to EU VAT legislation. Northern Ireland will remain subject to EU VAT legislation in respect of transactions involving goods, but not for services.

Acquisitions (purchases of goods from EU member states) will be treated as imports. A new system, Postponed Accounting, will be introduced and will apply to imports received from all over the world, with some exceptions such as low-value consignments. The system is intended to mitigate the cashflow disadvantage posed by paying import VAT upfront and waiting to reclaim it in a later VAT return. 

Under the new system, import VAT can be deferred and declared to HMRC in the VAT return for the period of importation. The VAT can be reclaimed in the same return subject to the normal rules for reclaiming input tax.

Dispatches (zero-rated sales of goods to business customers in EU member states) will be treated as exports. Exports are zero-rated, provided certain conditions are met.

Distance sales (sales of goods to non-business persons in the EU) will also be treated as exports. The EU distance selling regime and thresholds will no longer apply to UK suppliers.

Customs changes

On 1 January 2021, as the UK leaves the EU Customs Union, the United Kingdom will have a full external border with the EU. 

New border controls on imports from the EU to Great Britain will be enforced in phases, with customs declarations being postponed until 30 June 2021 for products which are not regulated.

Customs Duty

New Customs Duty rates for imports – called the UK Global Tariff – will be enforced from 1 January 2021.

To check the tariffs that will apply to different categories of imported goods, please see

Being ready for these changes is essential. Some practical steps that you can take now include:

Please contact us if you need more details to explore how we can help you progress smoothly into 2021.

Internet link: GOV.UK transition campaign

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