This week’s bulletin covers a round-up of the latest Brexit developments as well as a reminder that the deadline for applications to the UK government’s EU Settlement Scheme is 30 June. We also look at the EU’s new VAT rules for eCommerce which come into effect on 1 July as well as a reminder that a new iteration of the Institute’s Certificate in Customs and Trade begins in September.

Brexit weekly round-up

• There are reports that the UK and EU will agree common ground on the disagreement over the importing of chilled meats into Northern Ireland from Great Britain. The UK has requested a further three-month extension to a grace period allowing chilled meats to continue to be shipped into Northern Ireland until 1 October 2021.
• The deadline for applications to the UK government’s EU Settlement Scheme is 30 June. The UK government have already stated that they will not extend the deadline.Settled status givers European citizens the right to stay and work in the UK (including Northern Ireland) beyond 30 June 2021.
• A survey carried out by whatukthinks.org and the National Centre for Social Research found that if a second Brexit referendum had been held at any time in the past five years, 82 percent would vote the same way as they did in 2016. Just over one in three said that the UK secured a bad free trade deal.

UK

EU VAT e-commerce package commences on 1 July

The EU’s e-commerce package will introduce changes from 1 July 2021 in respect of the movement of goods from Northern Ireland to the EU and imports of low value goods into the EU or Northern Ireland. The package also introduces new rules for supplies made through online marketplaces, similar to those already applying in Great Britain and partly in Northern Ireland. HMRC has sent us a number of Q&As one of which confirms that the One Stop Shop procedure should be available for NI businesses to register from 1 July 2021. However, the Import One Stop Shop (IOSS) system will not be available in the UK from 1‌‌ ‌July 2021; until the system is fully implemented businesses can register in any EU Member State.

Two new EU-wide IT systems will be introduced: one for the declaration and payment of VAT on imports of low value consignments (IOSS); and the other for the declaration and payment of VAT on B2C sales of goods within the EU (OSS).

The changes will affect businesses:

• selling or supplying goods from Northern Ireland to non-VAT registered customers in the European Union (EU).
• making supplies of goods from the EU to non-VAT registered customers in Northern Ireland.
• sending low value goods to Northern Ireland (or the EU) from outside the EU and Northern Ireland (including from Great Britain (England, Scotland, and Wales)).
• ·non-EU businesses with goods located in Northern Ireland at the point of sale.

It also affects online marketplaces that facilitate the sale of goods:

• located in Northern Ireland (or the EU) by non-EU businesses to non-VAT registered customers in EU and Northern Ireland consumers
• from Great Britain to consumers in Northern Ireland and the EU

More information is available on GOV.UK and in the Q&As below.

“HMRC Q&As

Q1. Who is affected by the EU’s VAT e-commerce package that will be introduced on 1‌‌ ‌July‌‌ ‌2021?

The e-commerce changes will affect you if you are:

• supplying goods from Northern Ireland to non-VAT registered consumers in the EU
• supplying goods from the EU to non-VAT registered consumers in Northern Ireland
• sending 'low value' goods to Northern Ireland (or the EU) from outside the EU and Northern Ireland (including from Great Britain, England, Scotland, and Wales).

Under certain circumstances, online marketplaces that are facilitating transactions, will also be affected.

Q2. What are the changes that are being introduced in the EU’s e-commerce package?

The EU’s e-commerce package, which starts on 1‌‌ ‌July‌‌ ‌2021, will mean changes to the Business to Consumer (B2C) sale of goods between Northern Ireland and the EU, and the import of 'low value' B2C goods into the EU or Northern Ireland from outside the EU.

Overview of changes:

• a new single EU-wide threshold of £8,818 (€10,000) will be introduced for the B2C sale of goods in the EU. The threshold only applies to sales of B2C goods to and from Northern Ireland, which means that suppliers sending goods from the EU to consumers in Northern Ireland who exceed the threshold will have to account for UK VAT in the United Kingdom
• online marketplaces will be liable for collecting and accounting for VAT on goods supplied to consumers in Northern Ireland, under certain circumstances
• the EU will remove low value consignment relief (LVCR) on imported goods, which relieves import VAT on consignments of goods of up to €22. LVCR was removed in Northern Ireland on 1 January 2021 in line with wider UK reforms
• two new EU-wide IT systems will be introduced: one for the declaration and payment of VAT on imports of low value consignments (IOSS); and the other for the declaration and payment of VAT on B2C sales of goods within the EU (OSS). Both systems are designed to reduce administrative burdens on business and to facilitate the collection of VAT across the EU
• for goods sent from Great Britain to Northern Ireland via an online marketplace that is registered for IOSS, the online marketplace will be liable for payment of VAT on non-excise goods in consignments not exceeding an intrinsic value of €150, rather than the seller.

Q3. What are the One Stop Shop and Import One Stop Shop, and why are they being introduced?

To support UK traders, HMRC will introduce two new VAT e-commerce IT systems to link with the new EU-wide IT systems.

The One Stop Shop (OSS) will be introduced to reduce the administrative burden on businesses.

The new opt-in online One Stop Shop will provide traders with a quarterly VAT reporting and payment system and allows you to register for VAT electronically in a single member state for all the eligible sales of goods across any of the EU Member States. This will reduce the administrative burden on your business, as you will only have to deal with one administration, in one language, even if your sales are EU-wide.

For traders in the UK, only those who operate under the terms of the Northern Ireland Protocol, are VAT-registered and sell goods that total more than £8,818 (€10,000) per year to consumers in EU Countries from Northern Ireland, are eligible to register for the One Stop Shop Union Scheme.

The One Stop Shop will be available on GOV.‌‌UK for businesses to register from 1‌‌ July‌‌ ‌2021, additional guidance about this will follow.

The Import One Stop Shop (IOSS) is an optional VAT collection mechanism for imports of low value consignments.

The IOSS scheme is an optional accounting scheme that is available to businesses anywhere in the world importing low value non-excise goods, in consignments not exceeding £135 (€150), into the EU.

If you register for IOSS, you will need to charge and account for VAT on these supplies.

If your consignment is valued at £135 or more, then current rules continue to apply (i.e., Import VAT is due).

The IOSS system will not be available in the UK from 1‌‌ ‌July, and until the system is fully implemented businesses can register in any EU Member State.

If you are registered for IOSS and importing goods to Northern Ireland, you should notify HMRC of your IOSS number. Further information on how to do this will be available shortly.

Q4. What is Postponed VAT Accounting and what are the benefits?

Postponed VAT Accounting (PVA) allows UK VAT registered importers to account for and recover import VAT on their VAT return. PVA is available permanently and we expect that most businesses will choose to use it, because it provides significant cash flow benefits compared to the alternative of paying the import VAT when the goods are imported.

Q5. Do I have to use Postponed VAT Accounting if I delay my declarations?

Yes, if you are a VAT registered importer, and you delay your declarations or use a simplified customs declaration to make a declaration in your own records, you must use Postponed VAT Accounting (PVA). You’ll need to estimate the amount of import VAT to be accounted for on the VAT return covering the date you imported the goods.

If you’re not VAT registered, you must pay the import VAT on your duty deferment account when you make your supplementary declaration.

Q6. What steps should I take to benefit from Postponed VAT Accounting?

Here are some helpful steps that you should follow:

Step 1  Consider getting someone to do declarations for you, such as a Customs Agent, freight forwarder or fast parcel operator.

Step 2 Find out on this page when you must use PVA to account for import VAT on your VAT return and when it is optional.

Step 3 Find out how to:

• account for import VAT on the customs declaration
• complete your VAT Return to account for import VAT

Step 4 Talk to your tax advisor or anyone who helps you maintain your VAT records and complete your VAT return.

Step 5  Access the Customs Declaration Service to get your postponed import VAT statements that you need to complete your VAT return.

Q7. Where to find help and support about importing and exporting

We will continue to provide guidance and support to help you and your business, including information on GOV‌‌‌‌‌‌‌‌‌.UK, our popular live webinars and through this weekly email.

Give us a call

Our customer service advisors are available to answer your queries on the Customs and International Trade helpline. They’ll help you with importing, exporting and customs reliefs. The helpline is open from 8‌‌‌‌am to 10‌‌‌‌pm Monday‌‌‌ to‌‌‌ Fri‌‌day and from 8‌‌‌‌am to 4‌‌‌‌pm at weekends. Call to speak to an advisor on 0300‌‌‌‌ ‌322‌‌‌‌‌‌‌ ‌9434.

If you know of a business who would also find these weekly emails helpful, please forward it on, or suggest they register to get these updates directly to their inbox.”

EU VAT refund claims update

On 11 June 2021, Ireland made changes to their EU VAT refunds service which may affect any claims in draft status. You may need to re-enter the claim again if you did not complete and submit any draft claims before 4:30pm on 11 June 2021. Any new draft claims created before 14 June 2021 for VAT incurred in the Republic of Ireland may also be affected.

A full list of the EU member states now accepting VAT refund claims for 2021 expenses under the EU VAT Refund system is also now available.

HMRC’s EU exit webinars

Upcoming EU exit webinars are as follows:-

Importing – steps you need to take before making your supplementary declaration: to support those who’ve delayed their customs import declarations, HMRC explains the steps you need to take before you can make a supplementary declaration and how intermediaries can help you do this. 

Please register to take part if you’ve imported goods since 1 January 2021 and not yet completed a customs declaration for them.

If you’re planning to import and want to understand the full declarations process please register for Customs Import Declarations: an overview.

Exporting: what you need to do to keep your goods moving: an overview of the actions you need to take now before you export goods from Great Britain to the EU and move goods between Great Britain and Northern Ireland.

Key processes include zero-rated VAT, customs declarations, using an intermediary as well as licences, certificates, and authorisations. Please register to take part if you’re planning to export.

Trader responsibilities when using an intermediary: this webinar explains your responsibilities as a trader if you choose to use an intermediary to complete import or export declarations for your business. These are complex and an intermediary can save you a lot of time. Please register to take part if you’re planning to import or export.

Rules of Origin: watch our recorded webinar if you buy goods from the EU, or send or sell goods to the EU for your business, this webinar will help you understand rules of origin and what’s required to meet the rules. The recorded webinar can be paused or rewound to allow you to work through the information at your own pace. 

You can also:

• watch videos on HMRC's YouTube channel to familiarise yourself with the new customs processes and what you need to do before you trade goods with the EU;
• use the trader checklist to make sure you’re familiar with the new rules that affect you;
• use HMRC’s updated guides to understand the new customs and VAT requirements when moving goods between the UK and EU countries;
• sign up to the Trader Support Service if your client’s business is moving goods between GB and Northern Ireland and use their suite of educational products – including online training modules and webinars for support with the Northern Ireland Protocol;
• ask and get answers to specific questions about HMRC processes for importing or exporting, by visiting our forums; and
• watch webinars and videos from other government departments.

Brexit Support Fund application deadline is approaching

The Brexit Support Fund closes for applications at the end of this month - HMRC is encouraging eligible businesses to complete their application before then as the scheme application date will not be extended beyond 30 June 2021. This £20 million SME fund is designed to enable traders to access practical support, including training for not just new customs rules but support also with the rules of origin and VAT processes. From a recent discussion with HMRC we understand the evidence burden of these grants is much lighter than other grants and that an application can be made before 30 June 2021, but the evidence does not need to be submitted until 31 August 2021.

Anyone booking onto the Institute’s certificate in customs and trade course may be able to avail of the grant, subject to the relevant conditions being met for the scheme if the business is established in the UK.

Small and medium sized businesses that trade solely with the EU – and are therefore new to importing and exporting processes – are encouraged to apply for the grants. In a recent meeting with HMRC, the Institute was advised that applications have been low to date, especially in Northern Ireland, however thousands of businesses have started applications but not completed them. The scheme administrators are currently contacting businesses which have completed a registration but have not yet submitted their application.

The definition of SME under the scheme is very generous. Broadly, a qualifying business is one established in the UK with up to 500 employees and turnover of up to £100 million.

IRELAND

Revenue publishes new manuals on VAT eCommerce Rules

Revenue has published five new Tax and Duty manuals to outline the new VAT eCommerce rules that will take effect on 1 July 2021:

• Union Scheme – One Stop Shop (OSS)
• Non-Union Scheme – One Stop Shop (OSS)

• Import One Stop Shop (IOSS)
• Deemed Supplier
• Special Arrangements

H7 Super Reduced Data set for Low Value Consignments

As part of the changes to VAT eCommerce rules on 1 July 2021, Revenue will introduce into the Automated Import System (AIS), the new Super Reduced Data Set (the H7 dataset). The H7 dataset is fully aligned to the Union Customs Code.  Trader specifications and further information can be found in Revenue’s eCustoms notification 40/2021.

Certificate in Customs and Trade – starts 20 September

This 8-week online course focuses on the skills and knowledge required to meet the legal and regulatory requirements of international trade, specifically trade between Northern Ireland, Great Britain, and Ireland/EU post-Brexit. It will equip you to develop your career or business in international trade, preparing you to give advice, to perform agency functions, or to engage with customs authorities and the customs process on your own behalf or for clients.

On successful completion of this Certificate, you will be able to:

• Offer customs advice.
• Support applicants for customs authorisations and permissions.
• Develop plans and strategies for businesses facing Brexit-related challenges.

Significant ‘takeaways’ from the course are an up-to-date briefing on Brexit, comprehensive written reference material and sources, and recorded video talks on technical aspects of customs. More information.