Brexit trading rules for VAT-registered firms

Brexit trading


Oct 08, 2020


Business Advice Key Dates VAT

The United Kingdom leaves the European Union at 11pm on 31 December 2020, when the so-called transition period ends.  This will result in the implementation of a new ‘hard border’, to control the flow of goods on both sides. It is still unclear whether a Brexit trading deal will have been agreed with the EU by 31 December, but as it stands reaching such an agreement is looking increasingly unlikely.

In preparation for Britain’s formal exit from the EU, HMRC has started writing to VAT-registered businesses alerting them to the Brexit trading changes which will be required whenever they are doing business with EU nations.  If the changes affect your business then it’s important that you start to put new procedures in place now, to ensure that you’re ready and able to trade with the EU from 1 January 2021.


Staged import controls for Brexit trading

In particular, businesses will need to submit declarations when importing and exporting goods that are categorised as ‘controlled’. Controlled goods include alcohol, explosives and certain drugs. Import processes for non-controlled goods will be phased in over three periods in January 2021, April 2021 and July 2021.

You’ll need to confirm in advance whether your imported goods are classed as non-controlled and can therefore be transported under these staged import controls. If you’re a trader with a good compliance record then you’re likely to be able to defer import declarations on most goods for up to six months after 1 January 2021, depending on the nature of the goods.


Register for an EORI number

If you have been trading internationally you should already have an Economic Operator Registration and Identification (EORI) number. You’ll need this to complete customs declarations. If you don’t yet have one, you can register for free by going to

You’ll also need to decide how you are going to make customs declarations. Customs agents, freight forwarders and express operators can help you with declarations and ensure that you’re providing all the necessary information.


Import VAT at the border

You need to decide how you will account for import VAT when you make a customs declaration. HMRC has confirmed that from 1 January 2021 firms can use postponed VAT accounting to account for import VAT on their VAT returns for goods imported from overseas.

You will also need to check if import VAT is due at the border.  Import VAT will apply if the goods in your consignment exceed £135 in value. The only exceptions to this are excise goods and gifts.


What tariffs apply from 1 January?

From 1 January 2021, there will be new rates of customs duty for all imports which will be known as the UK Global Tariff.

The tariff rates for transactions with the EU will depend on whether or not a deal is reached. For example, if there is no deal with the EU the tariff on motor cars will be 10%, so many car dealers are suggesting that business should consider acquiring a new vehicle before 1 January. Visit to check the tariffs that will apply to goods you import.

These actions that you need to take will still apply, regardless of whether or not a trade deal is reached with the EU. If you haven’t yet received HMRC’s letter, you can read the online version.  You can also register for HMRC’s email updates if you want to keep up to date with the changes, and do please let us know if you have any queries or concerns that we can help you with.




Brexit trading rules for VAT-registered firms
Article Name
Brexit trading rules for VAT-registered firms
HMRC is warning VAT-registered businesses of the new Brexit trading rules which will come into effect when Britain leaves the EU on 31 December 2020. It's important to put new procedures in place now to ensure your business is ready.
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Paish Tooth
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