Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

February 13, 2020
2020-5222

UK customs and VAT treatment of imports and exports after Brexit transitional period

The United Kingdom (UK) left the European Union (EU) on 31 January 2020 (Brexit) and entered into transitional trading arrangements with the EU. The transitional period is due to end on 31 December 2020. After that date, unless a further extension to the transitionary period is agreed, the UK will cease to be treated as an EU Member State for all trade purposes.

The UK Government has announced that after the transitional period, all exports and imports will be treated equally. This will mean that traders in the EU and in Great Britain1 (GB) will have to submit customs declarations, undergo checks on their goods and pay value-added tax (VAT) at importation. However, this approach will not apply to the flow of trade between Northern Ireland and Ireland, or between Northern Ireland and GB (which will be subject to different arrangements).

The UK Government also confirmed that the policy easements that were previously put in place in 2019 for a potential no-deal Brexit have been withdrawn and will not be reintroduced for 2021, as it believes that businesses now have sufficient time to prepare for these changes. By implication, this likely means the ”Transitional Simplified Procedures” (delayed customs declarations and tariff payments) and ”Postponed Accounting” (deferred VAT) measures previously announced.

Therefore, effective 1 January 2021, all imports of goods into the UK will need to be accompanied by customs declarations, will be potentially liable to tariff payments and import VAT will apply at the time of importation. As a consequence, all UK importers will need to consider the implications of these changes for their future customs obligations, and the impact on their cash flow and financial arrangements (such as, the need for customs duty and import VAT deferment guarantees).

Endnote

1. England, Scotland and Wales.

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London

ATTACHMENT

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more