This week’s Brexit Bites covers the European Parliament’s formal approvement of the Trade and Cooperation Agreement. It also looks at the response received from the Tánaiste’s office on whether Northern Ireland resident directors can be recognised as EEA resident for the purposes of Section 137 of the Companies Act 2014., HMRC will join us on 10 May to update members on how the new VAT rules operate in Northern Ireland and we also share HMRC’s updated guidance on “at risk” goods.
European Parliament formally approves the EU-UK Trade and Cooperation Agreement
The European Parliament has approved the Trade and Cooperation Agreement between the EU and UK. 660 MEPs voted in favour, five voted against and 32 MEPS abstained from voting. The announcement was made by the President of the European Parliament David Sassoli this week (28 April). While the Agreement has been provisionally applied since 1 January 2021, the Treaty will enter force once the European Council has concluded it by 30 April. The UK have already voted in favour of the Agreement.
The announcement prompted positive reactions from both sides with European Commission President Ursula von der Leyen stating that “the TCA marks the foundation of a strong and close partnership with the UK. Faithful implementation is essential”.
European Council President Charles Michel has said Britain remains the European Union's "important friend and partner”. He further said on Twitter "I warmly welcome the results of the vote by the European Parliament on the EU-UK trade and cooperation agreement. It marks a major step forward in EU-UK relations and opens a new era."
Responding to the announcement, British Prime Minister Boris Johnson said: "This week is the final step in a long journey, providing stability to our new relationship with the EU as vital trading partners, close allies and sovereign equals. "Now is the time to look forward to the future and to building a more Global Britain."
UK Brexit negotiator David Frost remarked that the vote “brings certainty and allows us to focus on the future. There will be much for us and the EU to work on together through the new Partnership Council and we are committed to working to find solutions that work for both of us.”
Requirement to have an EEA resident director – response from Tánaiste
Section 137 of the Companies Act 2014 requires an Irish-registered company to have at least one EEA-resident director, which until the 31 December 2020 could include a UK (including NI) resident director. Following correspondence with the CRO, we wrote to the Tánaiste Leo Varadkar to seek clarification on the impact (if any) that the Trade and Cooperation Agreement reached between the EU and UK has on this requirement, and whether NI resident directors in particular will be recognised as meeting this condition. In his response, the Tánaiste said that his Department has sought the legal opinion of the Office of the Attorney General and officials will be in contact with the CRO once the advice has been received and considered. We are aware that this issue is of concern to many members, and we will keep you updated. Read the response.
The trading environment “has changed irrevocably” – Revenue’s 2020 Annual Report
Revenue released its Annual Report for 2020 this week and noted that the Office continues to focus on helping businesses in respect of the changes the UK’s departure from the EU has brought about.
Director General of Customs, Gerry Harrahill said his office recognises “that the significant and permanent change in the trading arrangements with Great Britain represents the biggest change for trade and business in almost 30 years, since the creation of the EU Single Market.”
To help businesses adjust, Revenue has recruited and trained additional staff, increased IT systems’ capacity to cater for the increased customs declarations and established a 24/7 Customs helpline to assist with queries on customs clearance and import and export controls.
Acknowledging that the transition to the new rules has been difficult for many traders, Mr Harrahill continued:
“In time, dealing with the customs and other regulatory formalities that now apply to goods moving to, from or through Great Britain will become routine for importers, transport operators and truck drivers. We are continuing to support trade and business in adapting to these new formalities and resolving specific individual difficulties.”
Read Revenue’s Annual Report.
Removal of credit/debit card option for online payments
From 12 April 2021, the option to make online customs and excise and VRT payments using a credit/debit card through ROS will no longer be available for taxpayers of Revenue’s Medium Enterprises (MED), Large Corporates (LCD) and Large Cases – High Wealth Individuals (HWI) divisions.
The online Single Debit Instruction payment option will continue to be available as normal for those affected. All other taxpayers will be unaffected by this change.
Read Revenue’s eCustoms notification 32/2021.
Webinar: The VAT on goods effect – HMRC update
Monday 10 May | 2:00pm - 3:00pm
Free webinar
You are invited to this webinar to help you understand:
- The practical implications of the new VAT on goods rules as they apply to Northern Ireland following the end of the transition period including:
- Moving goods between Northern Ireland and Great Britain
- VAT on goods sold from Great Britain, transported via Northern Ireland to the EU
- VAT on goods sold to Great Britain from the EU via Northern Ireland
- VAT implications for businesses moving their own goods
- Postponed VAT Accounting including accessing the PVA statements
- The practical implications of operating a dual VAT regime in Northern Ireland including registering for VAT, XI numbers and filing VAT returns.
A Q&A session will follow the presentation.
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Explainer on moving goods from Great Britain to Northern Ireland
The UK government have published a short explainer document on moving goods from Great Britain to Northern Ireland.
This document provides five key actions you can take now, as well as additional guidance and support. The five key actions detailed are:
- register for the Trader Support Service
- get an EORI number
- check your commodity codes
- check whether the UK trader scheme could support your business
- check goods regulation: manufactured and agri food goods
Information on VAT on goods sold between Great Britain and Northern Ireland, rules of origin and details of the Brexit support fund is also provided in the document.
HMRC updates “at risk” guidance
HMRC has updated its “at risk” guidance. This guidance establishes if you need to pay tariffs on the goods you bring to Northern Ireland because they are at risk of onward movement to the EU.
Two new pages have been added to the “at risk” guidance setting out the different tariff options for traders bringing goods into Northern Ireland; one for traders bringing goods from Great Britain, and one for traders bringing goods from countries outside of both the EU and the UK. The ‘declare not at risk’ section now only covers the applicable rules for declaring goods ‘not at risk’. The ‘UK Trader Scheme authorisation’ guidance page has also been updated in line with feedback from stakeholders.
Signposts to the updated guidance are provided below:
The UK Trader Scheme – important reminder
The UK Trader Scheme may be used if you intend to bring goods into Northern Ireland which you know are ‘not at risk’ of moving to the EU. HMRC has asked us to share an important reminder about the authorisation requirements, particularly if you supply goods to a business in Northern Ireland irrespective of whether or not you have a fixed place of business or an address there.
The UK Trader Scheme allows businesses to apply for authorisation to self-declare goods not “at risk” of entering the EU so that EU duty does not arise.
HMRC wishes to remind business of the importance of meeting all the criteria including the need to have an indirect customs representative in NI. The Trader Support Service is a qualifying indirect customs representative for these purposes.
Fixed place of business in Northern Ireland
If you’re not established in Northern Ireland, you can still meet the UK Trader Scheme establishment criteria, provided that you meet all of the following conditions:
- your customs operations are carried out in the UK;
- you have an indirect customs representative in Northern Ireland; and
- you have a fixed place of business in Northern Ireland which is all of the following:
- where part or all of your business takes place;
- a physical location you rent or own, which you must staff;
- where you sell or provide goods for final use by end consumers (including use by your own business or sale to retail outlets in Northern Ireland); or
- where relevant customs, transport and commercial documentation is available.
No fixed address in Northern Ireland
Until 1 November 2021 you can be authorised to declare goods ‘not at risk’ without having your own fixed address in Northern Ireland if all of the following applies:
- you do not have a fixed address in Northern Ireland but your customs operations are carried out in the UK and you have an indirect customs representative in Northern Ireland;
- you supply goods to a business in Northern Ireland which has a fixed place of business from where those goods are provided for, or sold to end consumers, and that business is either:
- authorised under the UK Trader Scheme
- could be authorised, if they were the importer of those goods
To be authorised to declare goods ‘not at risk’ in these circumstances, you must meet all of the other UK Trader Scheme criteria. However, this is only available to 1 November 2021.
By that date, HMRC is recommending that businesses take steps to restructure or amend contractual terms to meet the full requirements listed for UK Trader Scheme authorisation. If the full establishment criteria are not met by 1 November 2021, authorisation may be revoked meaning EU duty may arise.
Read the guidance
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