VAT, customs duty and trade in a no-deal Brexit

19 October 2019

At the time of writing, there remains a strong chance that the UK will depart from the European Union on 31 October 2019 without agreement on its future trading arrangements (no-deal Brexit). In light of this, it is important to note the key immediate tax issues relating to VAT, customs duty and trade that organisations can realistically focus on in the next few days to prepare. 

Check your Economic Operator Registration and Identification (EORI) number

If you buy or sell goods internationally and wish (or will be required) to make customs declarations, check that you have a UK EORI number (in the UK this will usually be your UK VAT registration number with a ‘GB’ prefix and a ‘000’ suffix). If you’re not sure or you don’t have an EORI number, you can check and apply online (at www.gov.uk/eori); an EORI will usually be issued within five working days of application. If you intend to make customs declarations in the EU post-Brexit you will need an EU issued EORI number. It should be noted that some UK businesses will have existing EORI numbers issued by other EU member states, which may prevent a UK EORI number application prior to Brexit. On the basis that EU EORI numbers may not be used in the UK after a no-deal Brexit, please contact Brad Ashton who can provide more information on how to proceed.

Contact your logistics providers

It will be critical to understand how your logistics providers will be able to support your business after Brexit. In order to enable them to make customs declarations on your behalf post-Brexit, you need to provide instructions to them to ensure those declarations are compliant. Providing instructions to them on your Incoterms, your EORI number, commodity codes for key imports and exports and information on any licensing requirements for regulated products will save time and money in the event of a no-deal Brexit.

Contact your key EU customers and suppliers

It will be essential to ensure that you have a shared understanding of who will take responsibility for import and/or export formalities and, in the case of services, what effect (if any) Brexit will have on the VAT treatment.

Given the remaining uncertainty over the nature and timing of the UK’s withdrawal from the EU, it is likely that many businesses will have further tax issues to address following Brexit. With that in mind, RSM has developed a readiness review to identify key VAT and customs duty related actions that should be considered in the event of a no-deal Brexit.

For more information on the immediate Brexit related tax issues identified above, or the readiness review we have developed, please get in touch with Andy Ilsley (VAT) or Brad Ashton (International trade).

Brexit - time to plan

There is no doubt that Brexit will have far-reaching impacts, with reverberations felt across every sector. Many in the business world will understandably be concerned.

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