In this week’s EU Exit Bulletin, we bring you an update from a phone call that took place between the UK and EU in an effort to resolve ongoing differences over the Northern Ireland Protocol. In other news, UK businesses should now be able to see their March 2022 import VAT statements on the Customs Declaration Service dashboard and can also ask HMRC for a certificate of trading status needed when claiming a VAT refund in another country. In Ireland, Revenue will introduce functionality updates to its Automated Import System next week.
EU and UK representatives discuss Protocol
Negotiations over the Northern Ireland Protocol continued this week between the UK and the EU in an effort to resolve ongoing differences. The UK’s Foreign Secretary Liz Truss and European Commission Vice President Maros Šefčovič spoke by telephone yesterday on the implementation of the Protocol.
In a statement following the call, Mr Šefčovič said that “It continues to be of serious concern that the UK government intends to embark on the path of unilateral action…. Unilateral action, effectively disapplying an international agreement such as the Protocol, is simply not acceptable. This would undermine trust between the EU and UK as well as compromise our ultimate objective – to protect the Good Friday (Belfast) Agreement in all its dimensions, while ensuring legal certainty and predictability for the people and businesses in Northern Ireland. Such unilateral action will also undermine the conditions which are essential for Northern Ireland to continue to have access to the EU single market for goods.”
Mr Šefčovič stressed the need for the UK and EU to work together to resolve the issues and believed that the proposals already put forward by the EU which substantially reduce the amount of customs checks on goods coming into Northern Ireland from Great Britain were workable.
In a statement following the call, Ms Truss said that the UK’s overriding priority is to protect peace and stability in Northern Ireland and said that the Northern Ireland Protocol had become the greatest obstacle to forming a Northern Ireland Executive.
Ms Truss also stated that the current impasse was causing unacceptable disruption to trade and had created a two-tier system where people in Northern Ireland weren’t being treated the same as everyone else in the UK.
Ms Truss rejected the EU’s proposals in terms of reduced customs checks and said that “if the EU would not show the requisite flexibility to help solve those issues, then as a responsible government we would have no choice but to act.”
The disagreement rumbles on it seems.
March 2022 import VAT statements now available
Businesses who were unable to view their March 2022 import VAT statement on the Customs Declaration Service dashboard are advised that these should now be available for viewing.
If a business had to complete its VAT return using an estimated import VAT figure, HMRC advice is to review the March 2022 statement which is now available. If adjustments are required, these should be made on the businesses next VAT return.
Guidance on how to complete your VAT return to account for import VAT is available on GOV.UK.
Certificate of status
UK businesses registered for VAT that are claiming a VAT refund in another country are able to ask HMRC for a certificate of status to confirm they are trading in the UK. From 1 May 2022, HMRC will issue the certificate to the business by email.
The new certificate of status of taxable person (VAT66) includes a direct link to the UK VAT registration checker which is designed to allow the refunding tax authority to verify the information provided on the certificate.
Miscellaneous updated guidance
The following documents/guidance relevant to EU exit have been updated/published recently:
Functionality update – Revenue’s Automated Import System (AIS)
Next week, Revenue will ‘go live’ with some system changes to the AIS. Revenue tells us that the changes are technical in nature and will not require traders to provide any additional or new data. However, the changes will result in stricter application of some business rules, which may cause some customs declarations to be rejected. The main changes will impact importers, declarants and AIS software providers are set out in Revenue’s eCustoms notification 25/2022.