If businesses have second-hand motor vehicles in stock that they bought in Great Britain and moved to Northern Ireland before 1 May 2023, the VAT margin scheme can only be used if those vehicles are sold by 31‌‌‌ October 2023. The Institute is discussing the impact of this deadline with HMRC, and the need to extend it.   We are aware that many second-hand car dealers have significant pre-1 May 2023 vehicles in stock which are selling very slowly due to the ongoing inflationary crisis and general economic conditions.   If sold after 31‌‌‌ October 2023, VAT must be accounted for on the full selling price of the vehicles as the conditions for the new second-hand motor vehicle payment scheme, which only applies to eligible motor vehicles moved from Great Britain to Northern Ireland after 30 April 2023, will not be met. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. Further guidance was published last week in relation to the Windsor Framework and the latest Trader Support Service bulletin is also available. And finally, we bring you more on the announcement last week that the UK has agreed a deal to associate to Horizon Europe.  Windsor Framework updated guidance  Last week HMRC published the following updated guidance documents (which includes guidance on moving parcels to and from Northern Ireland):-  The Windsor Framework - further detail and publications; Sending parcels to and from Northern Ireland;  Moving parcels from Great Britain to Northern Ireland under the Windsor Framework from 30 September 2024; and  The Customs (Northern Ireland) (EU Exit) (Amendment) Regulations 2023.  Horizon Europe  Last week the UK agreed a deal to associate to Horizon Europe, the EU's key funding programme for research and innovation. From 7 September 2023, UK researchers can bid into Horizon, certain that all successful UK applicants will be covered through the UK’s association (or through the guarantee) for the remainder of the programme. All calls in Work Programme 2024 will be covered by association and the UK guarantee scheme will be extended to cover all calls under Work Programme 2023.  For more information, see:- UK joins Horizon Europe under a new bespoke deal; and  Joint Statement by the European Commission and the UK Government on the UK’s association to Horizon Europe and Copernicus.  Miscellaneous updated guidance and publications   The following guidance, and publications relevant to EU exit are available:-  Customs declaration completion requirements for Great Britain;  Customs, VAT and excise UK transition legislation from 1 January 2021;  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020;  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Check simplified procedure value rates for fresh fruit and vegetables;  Apply for an Advance Origin Ruling;   Classifying edible fruit, vegetables and nuts for import and export;  Valuing imported fruit and vegetables using simplified procedure values with Method 4;  Check if a business holds Authorised Economic Operator status;  Notices made under the Customs (Import Duty) (EU Exit) Regulations 2018; and  Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service. 

This week we bring you news of what is happening with the Register of Overseas Entities, and HMRC has published a new set of Compliance Professional Standards. HMRC has extended the Capital Gains Tax (“CGT”) 60-day reporting paper form trial, and we bring you the highlights from the latest Agent Updates published over the summer (110 and 111) and an email from HMRC on the changes to alcohol duty which took effect from 1 August 2023. The most recent News and Information Bulletins from HMRC (27 July and 31 August) are also available. HMRC has also emailed us to advise that the online process for obtaining overlap relief information in the context of basis period reform will commence on the later date of 11 September. Compliance Professional Standards HMRC’s Customer Compliance Group (“CCG”) has introduced and published a set of Compliance Professional Standards. The Standards set out how HMRC should apply the HMRC Charter and Civil Service values in HMRC’s compliance activity. HMRC is sharing these to be open and transparent about how it aims to conduct its work in this space. The main objective is to clearly set out the way HMRC should behave and act when conducting any form of compliance work. The standards also aim to reinforce the CCG’s commitment to HMRC’s Charter. The four Compliance Professional Standards are as follows:- Getting things right; Being aware of a taxpayer’s situation; Being responsive - communicating with taxpayers; and Treating taxpayers fairly. The standards set out how HMRC should apply the HMRC Charter and Civil Service values in compliance activity. CGT 60-day reporting paper form trial extended HMRC has extended the trial of the paper version of the CGT 60-day return for property disposals until the end of September. It should be noted that a permanent solution is still required to assist those unable to file online who had issues receiving a paper form in the post in order to file within the necessary 60-day deadline. The simplest solution to this would be for HMRC to make the form downloadable from GOV.UK, hence this is being pursued with HMRC. Highlights from the latest Agent Updates Agent Update 110 confirms HMRC’s current position on digital records and signatures. Subject to exceptions, HMRC accepts digital records including scanned copies of documents with handwritten signatures. More information is available in Agent Update 110 which also contains updates on other topical areas including PPI (Payment Protection Insurance) claims, the new Alcohol Duty rates and reliefs, the HMRC online service for the new Economic Crime Levy, the UK Internal Market Scheme, overlap relief in the context of basis period reform, and self-service Time to Pay for VAT. In Agent Update 111, read about the National Minimum Wage and the VAT treatment of second-hand motor vehicles bought in Great Britain and moved to Northern Ireland before 1 May 2023 that are still held in stock, amongst other topics.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. Over the summer, HMRC published further detail and publications on the Windsor Framework, and the latest Trader Support Service and Borders Weekly Stakeholder bulletins are also available. We also bring you information on the interaction of the new alcohol duty rules with the Customs Declarations Service (“CDS”) and HMRC has announced a further delay to migrating exports from CHIEF (Customs Handling of Import and Export Freight) to the CDS which is now being phased in. And finally, the new Border Target Operating Model which was due to commence on a phased basis from the end of October 2023 for imports into the UK from the EU (excluding Northern Ireland) is also being delayed. Delay to the new Border Target Operating Model ("BTOM") After much speculation in recent weeks, it was confirmed last week that the new BTOM which was due to commence will be progressively introduced from the end of January 2024. The announcement was made when the UK Government published the Border Target Operating Model which model confirms the regimes for SPS (Sanitary and Phyto Sanitary) and Security and Safety controls for goods moving from the EU to Great Britain. The document also explains how these controls will be delivered through simplification, digitisation, and the UK’s new Single Trade Window. According to the announcement, the decision to delay some implementation milestones was made in response to stakeholder feedback in order to give businesses more time to prepare. Note that the BTOM does not provide detail on the arrangements for moving goods from Great Britain to Northern Ireland under the Windsor Framework (“WF”); hence stakeholders are advised to consult the guidance on the Windsor Framework for such goods movements. The final BTOM also confirms that in accordance with the WF, Northern Ireland businesses retain unfettered access to the market in Great Britain, whether moving qualifying NI goods directly from Northern Ireland or indirectly through Irish ports. A full timeline for introduction of these controls is set out within the BTOM. As a result of the delay in implementation, the UK Government has committed to publishing further detail to support businesses in their preparations. This detail will be published through supplementary annexes to the BTOM, and further guidance, that will be published on GOV.UK. A timeline for the publication of this further detail can be found in Section 4 of the BTOM. The Northern Ireland Civil Service (“NICS”) is eager to engage with stakeholders and business representatives to understand positions on and priorities in relation to the BTOM, and how it can best provide support during the forthcoming implementation period.  To that end the NICS will be in touch in the coming weeks to organise engagement. However, if you have any issues or concerns that you would like to raise in the interim, please send your message to the Post EU Exit Coordination Mailbox at peuec@executiveoffice-ni.gov.uk. In parallel if you have any technical queries or questions about the BTOM please contact border.enquiries@cabinetoffice.gov.uk. Note that by emailing the Cabinet Office you are consenting to be part of the Bulletin email distribution list. Following the BTOM publication, the Government is holding a series of sector specific online training sessions to prepare traders.  These will take place on the following dates:- 7 September 2023 – horticulture sector; 12 September 2023 – live animals/germinal products; 12 September 2023 - fisher products and seafoods; 13 September 2023 – fresh produce sector; 14 September 2023 – meat and poultry sector; 15 September 2023 – composite products sectors; 18 September 2023 – animal by-products sectors; 18 September 2023 – dairy sector; and 21 September 2023 – exports from Ireland. More information on these events and how to register can be found at  https://www.eventbrite.com/cc/the-btom-what-are-the-sps-border-controls-2144279. Phased migration of exports to the CDS  A phased approach has recently been announced to the migration of exports from CHIEF to the CDS. As a result, the final date for migration of exports to the CDS is now 30 March 2024, and not 30 November 2023, although some exporters must still meet the 30 November deadline. During the first phase, HMRC and its software developers intend to support selected high-volume declarants to move to the CDS for exports by 30 November 2023. The second stage of this approach will see all others move to CDS for exports by 30 March 2024. More information will be provided in due course to enable traders to determine in which phase they are required to participate. The new phased approach aims to enable HMRC and delivery partners to build on existing IT testing and undertake additional performance analysis while businesses with the existing IT functionality start to migrate. Interaction of the new alcohol duty rules with the CDS Changes to the structure of alcohol duty took effect from 1 August 2023. Pre-lodged CDS declarations submitted before this date which arrived on the CDS on or after 1 August 2023 and used the 300 and X300 codes need to be cancelled or amended. These can be amended until the declaration has arrived. Once the declaration has arrived, it cannot be amended and CDS will reject it. A new declaration needs to be submitted in these cases. Guidance is available on GOV.UK on how to cancel or amend a declaration on the CDS. Miscellaneous updated guidance etc. The following guidance, and publications relevant to EU exit are available:- Apply to claim a repayment or remission of import duty on ‘at risk’ goods brought into Northern Ireland; Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020; Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020; Reference document for authorised use: eligible goods and authorised uses; Customs, VAT and excise UK transition legislation from 1 January 2021; Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020; Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS); UK Trade Tariff: duty suspensions and autonomous tariff quotas; CDS Declaration Completion Instructions for Imports; Measurement unit codes for Data Elements 2/3 and 4/4 of the Customs Declaration Service; Apply to delay or pay less duty on goods you import to process or repair Check if you can pay less duty if your goods are imported into authorised use; Search the register of customs agents and fast parcel operators; CDS Customs Clearance Request Completion Instructions for Inventory Exports; and CDS Declaration Completion Instructions for Exports.

In this week’s EU exit bulletin, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service bulletin is also available and HMRC has sent an email about the impact of industrial action on 15 March on goods movements. Miscellaneous updated guidance etc. The latest guidance updates, and publications relevant to EU exit are as follows:- Apply for a certificate confirming an employee pays UK National Insurance when working abroad (CA3822); Check simplified procedure value rates for fresh fruit and vegetables; High risk food and feed of non-animal origin (HRFNAO): official certificates; Apply for approval to be part of the Registered Consignee scheme in Northern Ireland; Apply for approval to be a tax representative in Northern Ireland; Apply for an Advance Origin Ruling; External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service; Notices made and draft notices to be made under the Taxation (Cross-border Trade) Act 2018; Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS); Customs Declaration Service communication pack; External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service; Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service; and Manually arrive your goods in the UK.    

The Public Policy staff in the Chartered Accountants Ireland Advocacy and Voice Department write: On 24 December 2020, the EU and UK negotiating teams reached agreement in principle on a Trade and Cooperation Agreement (“the Agreement”), which provides for tariff-free, quota-free trade (where rules of origin criteria are met) and for sectoral cooperation in a number of important areas. The Agreement does not govern trade in goods between Northern Ireland (“NI”) and the EU where the Protocol on Ireland and Northern Ireland will apply. This means that no new procedures will apply to goods moving between NI and ROI (and the other Member States of the EU). We have assembled information on some key areas to help practitioners navigate the new trading environment. You can find further information on any of these areas in our Brexit hub. We continue to engage with UK and EU stakeholders on the changes that Brexit is bringing. For up-to-date information on Brexit developments and technical analysis, sign up for Brexit Digest. Recognition of your Chartered Accountancy qualification The UK’s departure from the EU results in some changes in the standing of the Irish ACA/FCA qualification. Students and Members in ROI who are EU citizens and who have qualified and gained the requisite experience in the EU prior to the end of the transition period, will experience no change in their rights and protections under the EU Qualifications Directive (Directive 2005/36/EU). Students gaining the Irish qualification in NI/UK post Brexit will be receiving a European qualification awarded in a third country. Members who are UK citizens (or other non-EU citizens), who qualified in NI/UK prior to the transition period and who have met the required EU-based experience requirements, will no longer be able to access the rights, among other things, to have their qualification recognised within the EU under the EU Qualifications Directive as they are not EU citizens under this Directive. The Irish ACA qualification continues to be recognised in Irish and UK law and members on both sides of the border continue to have mobility rights under the Common Travel Area (CTA) agreement. Additionally, members of this Institute will continue to have access to practice rights on both sides of the border. More information on the qualification’s standing in terms of Irish and UK law can be found here. VAT on services This section will be of immediate interest to practitioners with cross-border clients, and who need to raise fees for their services. From 1 January 2021, NI continues to follow the EU’s VAT rules for goods. However, as the UK-wide VAT rules for services will apply to NI, NI VAT-registered businesses are required to follow a dual VAT regime from 1 January 2021. The UK continues to levy VAT and the rules relating to UK domestic transactions continue to apply to businesses as before Brexit. VAT procedures for trade in services largely remain the same as those prior to 31 December 2020, but there are some changes to the VAT rules and procedures for transactions between the UK and EU member states. The VAT rules applying for supplying services between the UK and Ireland are now the same as the current rules for supplying services outside the EU. Broadly, the VAT treatment applicable to the supply of most business-to-business (B2B) services between Ireland and the UK will depend on the place of supply (i.e. the place of supply is the place where the business receiving the services is established). Using the example of an ROI business, if it receives services (including accounting services) from a business, including an accountancy firm, based in the UK after the transition period, in general Irish VAT will be due on the services. If an ROI practitioner provides services to a business based in the UK after the transition period, in general, UK VAT will be due on the services. See Revenue guidance and HMRC guidance. For business-to-customer (B2C) supplies of services from 1 January 2021, Irish VAT should not arise on the supply of certain services such as accounting, legal and consultancy work to non-business customers in GB or NI. If a UK business supplies accounting services to non-business consumers outside of the UK, the services are supplied where the customer belongs and are therefore outside the scope of UK VAT. See revenue.ie and gov.uk for more information. VAT on goods This Institute and the NI Tax Committee, chaired by Alan Gourley, have been engaging with HMRC on various Brexit matters, including customs changes and the NI VAT regime, throughout the course of 2020 and extensively on VAT in particular in recent months. We will continue to do so in 2021. For information on the VAT changes under the NI Protocol, VAT registration requirements in NI, VAT reporting obligations and key VAT system changes, distance selling rules and VAT on trade in goods between NI, ROI and GB, see our dedicated VAT information page on the Institute’s Brexit hub. VAT margin scheme on second-hand cars for Northern Ireland In mid-January, it was announced that the UK Government is seeking to reinstate the VAT margin scheme in NI on second-hand cars purchased from GB, in order to avoid a substantial increase in prices. This Institute has been lobbying HMRC to seek a derogation from the EU and reinstate the scheme for such goods and guidance has been released. We are in contact with Irish authorities seeking clarification on the position in ROI going forward and similarly whether the margin scheme can apply when second-hand cars are purchased in NI from GB and then onward sold to a car-dealer in ROI. We will keep members updated. Customs GB has left the EU’s Single Market and Customs Union meaning GB no longer benefits from the free movement of goods within the EU, and customs declarations are now required to move goods. NI remains in the EU’s Single Market and Customs Union for trade in goods only. This means that trade between the EU (and ROI) and NI remains largely unchanged. Members involved with importing/exporting particularly between GB and ROI are recommended to sign up to receive Revenue’s eCustoms notifications by contacting ecustoms@revenue.ie. For detailed information on the new customs rules visit our Brexit web centre. Data flows Cross-border data flows enable trade. We know that many businesses rely on the ability to transfer personal data about their customers or employees in order to offer goods and services. For example, an NI company’s payroll could be processed across the border in ROI. Any restriction on the ability of this data to flow freely would act as a trade barrier. Data protection did not form part of the Agreement but it has been agreed that an adequacy decision by the EU on the UK’s data protection regime will be made within six months i.e. by 30 June 2021. For now, data can continue to flow between the EU and UK as before which is good news in particular if you are outsourcing your IT or payroll function to a cross-border organisation. For more information see our website. Cross border workers The Common Travel Area arrangements will protect the rights of many of the estimated 23,000 to 30,000 cross border workers who live in one part of the island of Ireland and work in the other. While Irish nationals can continue to enter and work in the UK under the Common Travel Area agreement (and vice versa), this does not cover EU nationals living in Ireland and travelling across the border for example. Under the new UK immigration system that came into effect on 1 January 2021, both EU and non-EU nationals will be treated equally. Employers in Northern Ireland in particular should ensure that employees from other EU Member States are aware of, and encouraged to apply for, the EU Settlement Scheme which is open for applications until 30 June 2021. Employers should take action in light of new the post-Brexit immigration system, including verifying qualifications, considering the requirements under the new points-based system, and availing of any possible temporary transitional immigration schemes which may assist. Links to further information on employee mobility post Brexit can be found on our website. Online shopping Brexit was always going to bring new trading rules; and the costly impact of the UK’s departure from the EU has been felt by online shoppers since the start of the year. VAT and customs charges which until now might have earned a brief glance by online shoppers on payment screens, are now causing costs, confusion and even shipping delays. Most notably, consumers in ROI should be aware of the following changes when buying from GB (not NI): • If the good costs more than €22 (the customs value plus transport, insurance and handling charges), Irish VAT will apply. This VAT is generally payable by the buyer, unless like Amazon, the company picks up the bill. The €22 threshold will be abolished from 1 July 2021. • Orders with a value below €150 (including transport, insurance and handling charges) will not be liable to Irish customs charges regardless of where the goods are made. • The free trade agreement states that there will be no customs duties on goods coming to ROI from GB where those goods are made in the UK. However, if you purchase something online that costs more than €150 and it is not made in the UK, customs duties will apply for the buyer and the rate of the charge will depend on the type of product ordered. You can find all the rates in the TARIC database. • See Revenue.ie for more information. For consumers in GB, buying goods online from ROI/EU Goods with a value of STG£135 or less: • If the goods are outside the UK and sold through an online marketplace to customers in GB, the goods will have UK supply VAT charged at the point of sale. • If the goods are outside the UK and EU and sold through an online marketplace to customers in NI, the goods will have import VAT charged. Consignments valued at more than £135 Normal VAT and customs rules will apply on importation of the goods into GB from outside the UK or into NI from outside the UK and EU. This means that the customer will have to pay VAT to Royal Mail for example before the goods can be delivered. Customs The free trade agreement eliminates customs duties on goods coming to GB from ROI where those goods are made in the EU. If this isn’t the case, UK tariffs could apply and the rate will depend on the goods purchased. For more information see gov.uk.