Brexit Bulletin, 10 August 2020

Aug 07, 2020

 

 

In today’s Brexit Bulletin, we bring you some further details of how customs arrangements will work between Britain and Northern Ireland from 1 January 2021. You can also read about the European Commission’s proposed changes to the EU’s VAT rules in preparation for the end of the transition period with the UK on 31 December 2020, as well as the latest updates to the UK points-based immigration system set to kick in on 1 January 2021. 

 

UK government to act as customs adviser for traders

On Friday 7 August, the UK government announced that a Trader Support Service will be launched shortly to support customs arrangements between Britain and Northern Ireland when the UK leaves the EU customs union at the end of the year. The service will be available to all traders at no cost and will provide support and guidance on information needed to trade in certain products. 

From 1 January 2021, goods entering Northern Ireland from Britain will need customs declarations. Under the NI Protocol, the UK and EU have agreed that to avoid a hard border on the island of Ireland, Northern Ireland will continue to follow EU rules on agricultural and manufactured goods, while the rest of the UK will not. While the UK will leave the EU customs union, Northern Ireland will continue to enforce the EU’s customs rules at its ports. 

While the information released is relatively light on detail in terms of how the system will work, what we do know is:

  • A new Trader Support Service will be available to all traders at no cost, reportedly from September.  This service will provide support and guidance on the processes and information needed for certain products. Effectively the UK government will act as a customs adviser for businesses.
  • Traders will have to provide information digitally on the goods being moved. The Trader Support Service will use this information to complete declarations on behalf of companies, according to the UK guidance released.
  • Businesses who have an EORI number will be provided with a reference ID to use the service.
  • All traders who wish to use the support are encouraged to sign up for further information.
  • Further details on how electronic processes will work will be set out by the UK government in due course.

To recap, the broader customs arrangements that will apply after the transition period ends on 31 December 2020 are as follows:

  1. Moving goods from Northern Ireland to Great Britain
    The process remains the same. 
  2. Moving goods from Great Britain to Northern Ireland
    Changes will apply and customs declarations will be required. A new Trader Support Service, available to all traders at no cost, will be established to provide support and guidance on the processes for food and agricultural products.
  3. Trade in goods between Northern Ireland and Ireland, and between Northern Ireland and EU Member States
    This process remains the same.  There will be no changes at the border, no new paperwork, and no tariffs or regulatory checks.
  4. For trade with the rest of the world
    Northern Ireland will benefit from UK Free Trade Agreements. 

VAT rules with Northern Ireland after the transition period 

The European Commission has proposed changes to the EU’s VAT rules, in preparation for the end of the transition period with the UK on 31 December 2020. The amendment to the VAT Directive introduces a special identification number for businesses in Northern Ireland, so that EU VAT provisions can be properly applied to goods, in line with the Protocol on Ireland / Northern Ireland.  

Under the Protocol, EU VAT legislation will continue to apply to goods traded in Northern Ireland. This broadly means that goods sold and transported from Northern Ireland to the EU (and vice-versa) will be treated in the same way as cross-border supplies of goods within the EU.  This includes VAT exemptions and deductions. 

The provisions will not apply to supplies of services in Northern Ireland. UK VAT rules will apply after the transition period. Supplies of goods and services made elsewhere in the UK will also be subject to UK rules for VAT.

 For more information read the European Commission’s update.

 

UK points-based immigration system: Further details revealed

The UK government has released further details on how the new points-based immigration system, set to kick in on 1 January 2021, will operate. In the latest statement, the UK government has reiterated the immigration status of Irish citizens, confirming there will be no change to their rights to enter, live and work in the UK without requiring permission. There will continue to be no routine immigration controls on travel from within the Common Travel Area to the UK, and no immigration controls on the land border between Northern Ireland and Ireland.

This statement includes further information on:

  • The requirements of the points-based system
  • Salary and skills thresholds for skilled workers
  • A route for students and graduates
  • Who can apply?
  • Visiting the UK
  • Other immigration routes

 

As PricewaterhouseCoopers (PwC) is administering the grants for HMRC, interested applicants can apply online through PwC. For more information, visit the dedicated page on the GOV.UK website.

Financial services legislation under the EU (Withdrawal) Act 2018

The UK government has released a collection of papers that sets out how HM Treasury intends to use the powers under the European Union (Withdrawal) Act 2018, to ensure that the UK will have a functioning financial services regulatory regime in all scenarios when the UK leaves the EU.