HMRC answer Frequently Asked Questions on New Trade rules

New rules for businesses that trade with Europe are here.

Now that the Brexit transition period has ended, all businesses that move goods between Great Britain and countries in the EU, or under the Northern Ireland Protocol, must follow new customs and tax rules since 1 January 2021. HMRC have provided answers to some of the most frequently asked questions on the new trade rules.

1. Customs processes are complicated. Who can help me complete them?

Most traders find that they need specialist support to help with importing from or exporting to the EU. For instance, you might decide to use a customs intermediary. A customs intermediary is someone who makes customs declarations for you or your business. This could be:

  • a freight forwarder – a company that helps their clients move cargo globally, including supporting the customs process
  • a customs agent or broker – these make sure your goods clear through customs. If you decide to use an intermediary, make sure you approach them as soon as possible, as there is high demand for these services. You can find a list of businesses that can help on GOV.UK.

There are still specific actions you will need to take if you get an intermediary to help you with your customs declarations. You will:

  • be responsible for paying any taxes or duties owed;
  • be responsible for providing details about your transactions to your chosen intermediary;
  • need to apply for an Economic Operator Registration and Identification (EORI) number (if you don’t already have one). An intermediary can’t apply for an EORI on your behalf and they will need this to complete your customs declarations. You can register for free on GOV.UK. It takes 5 to 10 minutes to apply and you will normally receive it in under a week.

For more information, you can:

2. My business is located in the United Kingdom and I export goods to EU customers, can you explain how I should account for VAT?

If you sell, send or transfer goods out of the UK you do not normally need to charge VAT on them in the UK. You can zero-rate most exports from:

  • Great Britain to a destination outside the UK
  • Northern Ireland to a destination outside the UK and EU.

If you incorrectly charge UK VAT on exports of goods, your customers may also have to pay VAT in the country where the goods are imported. Different rules may apply in different countries. Therefore, it’s important that you understand the import VAT rules of each EU country that you sell to. You can find out more about exports, sending goods abroad and charging VAT on GOV.UK.

3. I send goods from the United Kingdom to my customers in the EU, has anything changed about how I should account for VAT?

Yes. Previously, before the end of the transition period:

  • VAT was due on the goods that you sold to your EU customers. If your EU customer was not VAT registered themselves (for example, because they were a private individual) you accounted for UK VAT in the UK. If your sales to EU customers breached an annual distance selling threshold you had to register for VAT in that EU Member State and account for EU VAT in that country.
  • If your EU customer was registered for VAT in their own country your business zero-rated the sale as a ‘dispatch’ and your EU customer accounted for the VAT as an ‘acquisition’ in their own country.

Now, following the end of the transition period:

  • if you are a business subject to the Northern Ireland protocol, the above rules will still apply.
  • if you are a business moving goods from Great Britain to the EU, your goods should be zero-rated exports from the UK and import VAT will be due to be collected from the EU recipient at import into the EU and subject to EU rules.
  • different rules may apply in different countries – therefore, it’s important that you understand the import VAT rules of each EU country that you sell to.
  • you can find more information and guidance about the conditions for zero-rating VAT on the goods you export, and what you should do when you export goods in specific circumstances on GOV.UK.

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