Brexit Bites, 5 March 2021

Mar 04, 2021

This week’s Brexit Bites covers details of two important submissions made by the Institute in respect of EU exit issues. We also bring you updated information from Revenue on changes to PBN and Automated Import System (AIS) as well as guidance from the Trader Support Service on supplementary declarations and simplified frontier declarations for controlled goods.  Some answers from HMRC to frequently asked questions on the new trading rules are also examined.

EU exit lobbying and submissions

It was a busy week last week with two important submissions made in respect of EU exit issues. A letter was sent to HMRC on the importance of implementing and publishing a soft-landing policy for VAT compliance where genuine errors are made. The Institute’s NI Tax Committee also made a submission to the NI Affairs Committee’s Call for Evidence on Brexit and the NI Protocol.


In 2020, the Institute and the NI Tax Committee lobbied HMRC and the UK Government extensively in the lead up to the end of the EU transition period on matters such as VAT and Northern Ireland. These discussions are continuing in 2021. As part of these discussions, the importance of ensuring businesses getting to grips with extensive changes to tax rules, including VAT, are afforded a soft landing where mistakes and genuine errors are made is critical.

Last week the Institute wrote to HMRC on the importance of ensuring a soft-landing policy is formulated and announced to businesses as soon as possible. A copy of that letter was also sent to Minister for the Economy, Diane Dodds MLA.

Call for evidence: The NI Protocol

The NI Tax Committee also made a submission last week to the NI Affairs Committee’s Call for Evidence on Brexit and the Northern Ireland Protocol. The submission sets out the extensive work carried out in 2020, which continues in 2021, by the NI Tax Committee and the Institute on post EU exit with HMRC and the UK Government. Engagement is also being undertaken with officials from the Department for the Economy, the Northern Ireland Office, and the Cabinet Office.  In addition, the Institute is represented on the Secretary of State’s Business Engagement Forum.

The response to the NI Affairs Committee stresses that although the Protocol does bring challenges to businesses as they adapt to new rules, particularly in the midst of the pandemic, our engagement with businesses over the past few weeks in particular has shown that some feel many of the “unknowns” are becoming “knowns” and things are beginning to settle down as supply chains are reworked and bedded down.

The dual status of Northern Ireland in both the UK and EU Single Market for goods gives a unique opportunity to the region in terms of attracting foreign direct investment, particularly in the manufacturing and distribution sectors.

In conclusion, the full consequences of the Protocol are unlikely to be felt until later this year, when the three- and six-month grace periods on customs checks are expected to be lifted on goods moving from GB to NI. The submission states that now is the time to create awareness and educate businesses about the customs compliance that is required when those grace periods end. Otherwise, the confusion seen in January 2021 will be repeated.

Overall, the submission highlights that certain issues do remain which are as follows: -

  • The lack of practical guidance available to businesses and delays in issuing guidance;
  • The late implementation of the Trader Support Service;
  • GB supply issues;
  • Confusion and difficulty understanding the rules of origin;
  • The application of the “at risk” rules particularly in the cases of wholesaler arrangements;
  • The need for customs declarations to return goods from GB to NI;
  • NI group with companies in NI and GB experiencing difficulties moving goods and work between sites;
  • The shortage of experienced customs intermediaries;
  • The challenges presented by SPS checks and Export Health Certificates on goods moving between GB and NI; and
  • The importance of a soft-landing approach to compliance.

 Changes to PBN functionality – Revenue

Pre-Boarding notifications (PBN) applies to all consignments using ferry RoRo services. Revenue has examined further enhancement to improve the capabilities of the services and as a result has introduced additional functionality for users of the PBN services. 

When inbound PBNs are being created up to two mobile phone numbers and/or an email address can be added.  These can be added up to the point that the PBN is checked in with the ferry operator. 

When the vehicle channel becomes available at 30 minutes prior to arrival of the vessel into Ireland, Revenue will issue a text message with the channel to the mobile phone number(s) in the PBN; and issue an email with the channel to the email address in the PBN   

Where the original channel is Call to Customs and is subsequently updated to Exit the Port, Revenue will notify this updating of the channel to: 

• The mobile phone number(s) by text and 
• The email address by email.  

Read Revenue's eCustoms notification 25/2021. 

Amendments, Invalidations and Refunds in AIS

Revenue has advised that only a declarant or his or her representative can amend, invalidate a declaration, or apply for a refund. Revenue's eCustoms Notification 27/2021 provides further details on how to do each of these. Read the notice.  

Importing vehicles from Northern Ireland

If a vehicle is imported into Ireland from Great Britain, the importer is required to complete a customs declaration prior to import and pay customs duty, if applicable, and VAT at the standard rate.  Revenue's eCustoms Notification 26/2021 sets out more details and also provides information where used cars are imported from Great Britain into Northern Ireland.  

Trader Support Service - Supplementary Declarations

Since mid-February, the Trader Support Service (TSS) has provided a digital platform to submit supplementary declarations for standard goods. From 15 March you will also be able to use TSS to submit supplementary declarations for controlled goods. 

For more information on Supplementary Declarations, click here.

Simplified frontier declarations (SFDs) for controlled goods

The changes to TSS processes affecting movements of controlled goods have moved to 8 March to give more time to prepare.   From then your SFDs for controlled goods will be rejected if your data isn’t correct. You will not then receive a movement reference number (MRN) and may be unable to move your goods into NI.

To find out about controls that apply to goods you move, please check the NI Online Tariff and here for help on how to use the tool.  

For more information on preparing and submitting SFDs, you can:

It is recommended you submit your declaration data at least 24-48 hours before your desired departure time in case there are any issues with this data. 

New documents about the Trade and Cooperation Agreement between the UK and EU

Three new supporting documents have been made available: 

  • Letter from European Commission Vice-President Šefčovič proposing extension of provisional application of UK-EU Trade and Cooperation Agreement. 
  • Letter from Chancellor of the Duchy of Lancaster agreeing to the extension of provisional application of UK-EU Trade and Cooperation Agreement. 
  • Draft decision of the UK-EU Partnership Council extending provisional application of the UK-EU Trade and Cooperation Agreement. 

To view these, click here

Updated UK Guidance on Sending goods to the EU through roll on roll off ports or the Channel Tunnel

Guidance on transporting goods to the EU from the UK via these channels has been updated with a new section on Assumed Departure. For more information, click here.  

Updated UK guidance on Importing from the UK and Exporting to the UK

Guidance for EU businesses has been updated with new information on: wood packaging material, importing animals, bringing food into the EU, and transporting goods. For more information on importing to the UK click here, and for more information on exporting to the UK, click here.  

Updated UK guidance on taxes and tariffs for EU businesses trading with the UK

Guidance about taxes and tariffs for EU businesses trading with the UK has been updated with new Information about paying VAT or claiming VAT refunds. For more information, click here.  

HMRC answers to frequently asked questions on the new trading rules

HMRC have set out answers to some frequently asked questions from businesses this week including.

Question 1: What does the UK’s zero tariff deal with the EU mean for businesses?

Answer: The UK has left the EU customs union so there are changes to the way that we do business with the EU. The deal that the UK has agreed with the EU means that UK businesses may be able to continue to:

  • sell goods to the EU without their EU customer being charged Customs Duty.
  • buy goods from the EU without being charged Customs Duty when their goods arrive in the UK.

However, this isn't the same as being in a customs union. To benefit from the zero rate of duty, businesses will have to provide proof that their goods (or their parts/ingredients) originate in the EU or the UK (as the exporting country). Where the goods originate from means where they are manufactured or produced, not just where they are shipped or bought from. The answer to question 2 explains what proof you will need to claim the zero rate of duty.

Businesses will still need to pay VAT on goods imported from the EU into Great Britain, where applicable. For more information on paying VAT on goods imported into the UK, please see the answer to question 3.

Question 2: What proof do businesses need to claim the preferential zero rate of duty for goods they import from the EU into the UK?

Answer: If you import goods from the EU into the UK, that originate in the EU, you need to prove to HMRC that you can claim the preferential zero rate of duty.

First, you will need to classify your goods and check if they meet the rules of origin requirements included in the UK’s deal with the EU; the Trade and Co-Operation Agreement (TCA). Here’s more information about the rules of origin requirements under the UK’s deal with the EU. If your goods meet the rules of origin and product specific rules, you will be able to claim the preferential zero rate of duty.

To claim, you will need to provide proof that your goods comply with the rules of origin. This can be either:

  • a statement of origin – showing that the goods are originating, made out by the EU exporter.
  • through evidence you’ve obtained (‘importer’s knowledge’) that the goods are originating in the EU.

You can find more information about the proof you need to provide and how to claim the preferential rate of duty on GOV‌‌‌.UK.

If you choose to delay making declarations for goods you import into the UK from the EU, you do not need to provide proof of origin until you make your supplementary declaration.

Question 3: Do traders need to pay VAT for goods they import?

Answer: VAT will be due on all goods:

  • imported into Great Britain from overseas
  • imported into Northern Ireland from outside the EU
  • sold between Great Britain and Northern Ireland, as well as movements of own goods from Great Britain to Northern Ireland.

VAT on goods imported from outside the UK

If you buy goods from outside the UK which don’t exceed £135 in value the seller, or online marketplace (OMP) if sold through one, must charge and account for VAT when the goods are sold.

Business to business sales that do not exceed £135 in value are also covered by the new rules. Where the UK VAT registered business provides the OMP or direct seller with its VAT registration number, the responsibility to account for VAT is with the UK VAT registered business customer, who will account for it if the goods are supplied in:

If a valid UK VAT number is not provided, the direct seller or OMP, must treat the transaction as though it were a business to consumer sale and charge VAT accordingly.

You can find more information on GOV‌‌‌.UK about the VAT treatment of overseas goods sold to UK customers either directly or through an online marketplace. If you buy goods from outside the UK that exceed £135 in value, you will need to pay import VAT when your goods arrive in the UK. HMRC uses commodity codes (also known as tariff codes) to work out the amount of VAT and Customs Duty that you owe on goods you move in or out the UK. When you complete your import declarations, you must make sure you included the correct commodity code. Once you have the correct code, you can check if you need to pay VAT or duty, and how much. You can use the Trade Tariff tool on GOV‌‌‌.UK to find the correct commodity code for your goods. If you have hired a customs intermediary to deal with your import and export declarations, they will be able to help, but you will need to provide accurate information about your goods.

VAT on goods sold or moved between Great Britain and Northern Ireland

Import VAT will be due on goods sold between Great Britain and Northern Ireland, as well as movements of own goods from Great Britain to Northern Ireland. However, it should be accounted for by the seller/sender of the goods on the VAT return. You can find more information regarding the VAT treatment of goods moving to and from Northern Ireland on GOV‌‌‌.UK.