Exporting in 2021

These rules affect all exports and many imports. You need to know them, as they affect you or your customers or suppliers. They were published on 31 December 2020.

Support

There is little or no Government support to help you with this. The costs and time fall on your business, and the sooner you get to grips with it, the quicker you can start selling to recoup that expense.
There are however some small support schemes that you might want to investigate:

  • Training for customs systems (very limited) - https://www.export.org.uk/page/CustomsGrants

  • Export admin training and preparation funding - https://opentoexport.com/blog/new-grant-funding-to-help-business-prepare-for-brexit/

  • Export finance help - https://www.great.gov.uk/advice/get-export-finance-and-funding/get-export-finance/

Hopefully more will come soon, but WTO rules preclude much specific help in this area as it is seen as “unfair support”.

General rules

Customs movements that start ahead of the end of the transition period will continue under the rules in place when the movement started, provided the goods being moved have Union status.

Goods have Union status if they’re in free circulation in the EU, having either originated in the EU or having been imported from outside the EU and released for free circulation.

Goods start their movement when either:

  • you, or another person on your behalf, collect the goods in order to bring them to:

    • Great Britain from the EU or from Northern Ireland

    • Northern Ireland from Great Britain

  • you despatch the goods to:

    • Great Britain from the EU or from Northern Ireland

    • Northern Ireland from Great Britain

If you’re carrying goods in accompanied baggage, the movement starts when the aircraft, train or vessel on which you are bringing the goods to Great Britain from the EU or from Northern Ireland, or to Northern Ireland from Great Britain, is scheduled to depart.

If you’re moving goods between non-EU countries and the UK at the end of the transition period, from 1 January 2021, the UK will apply a UK-specific tariff to imported goods. This UK Global Tariff will apply for import declarations that are accepted after 11pm on 31 December 2020.

Sector rules

If you trade goods with countries in the EU, the rules are now set by the EU and are here: https://ec.europa.eu/taxation_customs/uk_withdrawal_en

If you are a service provider to the EU, Switzerland, Norway, Iceland and Liechtenstein - then you need to apply all of this - https://www.gov.uk/guidance/providing-services-to-any-country-in-the-eu-iceland-liechtenstein-norway-or-switzerland-after-eu-exit

If your suppliers are in the EU, you will need to understand this - https://www.gov.uk/eubusiness

For more details on export processes see - https://www.gov.uk/guidance/ongoing-customs-movements-and-procedures-at-the-end-of-the-transition-period

The rules for plants and plant products are here - https://www.gov.uk/government/collections/importing-and-exporting-plants-and-plant-products

The rules for excise goods are here - https://www.gov.uk/guidance/exporting-excise-goods-to-the-eu-from-1-january-2021

The rules for military or controlled goods are here - https://www.gov.uk/guidance/exporting-controlled-goods-after-eu-exit

The sanctions policies are here - https://www.gov.uk/government/publications/sanctions-policy-after-31-december-2020

VAT

There are major changes to VAT

  • For UK digital services to EU consumers, the UK is no longer be a member of the EU Mini One-Stop-Shop single VAT return scheme. UK sellers of electronic, broadcast or telecoms services to consumers will therefore have register in any other EU state, as a non-Union businesses, to continue to file their VAT declarations for EU e-service sales. EU sellers into the UK have to now register with the UK’s HMRC for the same declaration. Any non-EU business which used the UK MOSS registration now has to reregister for MOSS in the EU and separately in the UK under a regular VAT return.

  • The UK will no longer have to assume the EU VAT Directive rules into its own VAT Act. For example, it will no longer have to maintain a minimum VAT rate of 15%. However, since UK VAT rate is 20%, and the consumption tax accounts for almost a third of tax revenues, any reduction is highly unlikely.

  • The UK will have complete control over its reduced VAT rates, which are currently restricted within the rules of the EU VAT Directive. Although this may be a moot point from 2022 as the EU states have agreed that they will enjoy full rate setting powers.

  • The ending of zero-rated B2B intra-community supplies; all movements are now imports or exports, subject to UK or EU import VAT. Businesses moving goods now need two EORI numbers to move goods between the UK and EU.

  • By way of compensation, the UK has introduced a Postponed VAT Accounting import VAT deferral scheme so no cash VAT payment has to be made by business importers to UK customs. However, many EU countries do not offer the same scheme for UK businesses importing their goods.

  • The loss of Distance Selling thresholds for UK e-commerce sellers of goods to EU consumers. Goods are now be subject to import VAT, and UK sellers will have to consider VAT registering in Europe immediately. Similarly, EU e-commerce sellers may now need to register immediately for UK VAT if they have been selling to UK consumers under the £70,000 threshold.

  • Any UK business with a foreign VAT registration in the EU may now face the obligation to appoint a special VAT fiscal representative. This applies in 19 of the 27 EU states. These agents hold direct liablity for any unpaid VAT, and therefore require cash deposits or bank guarantees in exchange.

  • The scrapping of the UK £15 low-value consignment stock relief which exempts imports of goods (including from the rest of EU after Brexit) from VAT. Instead, for goods at £135 or below, sellers or their postal service have to declare and pay to HMRC via a new, quarterly filing, VAT charged at the point-of-sale.

  • There are limted changes on the Brexit VAT on services for B2B transactions after the UK leaves the EU VAT regime. The reverse charge will still apply. In the future, the UK may deviate from some of the use and enjoyment rules. There are changes on certain cross-border B2C services to EU consumers (and vice-a-versa).

  • UK businesses incurring EU VAT on travel, hotel or other expenses are no longer be able to use the 8thDirective online VAT reclaim system operated via HMRC. Instead, they must use the 13th Directive paper-based reclaim process. This requires individual claims to each country where there is a VAT claim. Last UK claims via the 8th Directive will be for the final quarter of 2020.

  • As part of the WA, Northern Ireland (NI) is now in a special VAT and customs relationship with the EU. Whilst NI remains within the UK VAT area, it tracks EU rules, including zero-rating for VAT on intra-community supplies across the Irish border. EU VAT on imports into Ireland via Northern Ireland are collected by the UK authorities.

  • Intrastat reporting after Brexit is still be required for 2021 for arrivals / imports into GB from the EU. But they will not be required for distpatches / exports to the EU.