Share this content

Brexit: Customs checks will be relaxed in no deal scenario

20th Feb 2019
Share this content

HMRC has unveiled Transitional Simplified Procedures (TSP) for UK businesses importing goods from the EU, doing away with the requirement to comply with onerous customs procedures in the event of a no-deal Brexit.

In a letter to 145,000 VAT registered businesses, Jim Harra, HMRC’s deputy chief, explained that companies would be able to defer a full customs declaration until after the goods have crossed the border. Businesses can also postpone paying their import duties.

These procedures will be implemented at ‘roll on, roll off’ (or ro-ro) ports like Dover or the Channel Tunnel. Ro-ro freight works for inter-EU trade because it requires little prep and offers lower fees in the destination port, compared to containers.

Customs checks in the event of a no-deal would likely harm this arrangement. The TSPs, then, want to soften the landing for British importers. Effectively, goods shipped to the UK from the EU will be waved through British ports without checks.

The sign up for TSP online can be found here. You’ll need an EORI number to do this. The government said it would review the procedures “three-to-six months after they’re introduced on 29 March 2019” (the day of the UK’s planned exit from the EU).

“If we decide to withdraw them we’ll give you a 12 month notice period. This will give you enough time to prepare your business to follow the import processes you’ll need for trading with the rest of the world.”

Harra’s latest letter follows on from a promise made in September last year that government would prioritise stability for businesses and “ensure that interventions in a no-deal scenario are conducted in a way which minimises delays and additional burdens for legitimate trade”.

The September letter insisted, however, that the government would “robustly” ensure compliance. But it seems like there’s been some give on this front as the realities of no deal have set in. Indeed, that letter rather innocently labelled a no-deal scenario as “unlikely”.

Changes to VAT IT systems

The latest Harra later shed more light on how access to certain EU VAT IT systems will be affected by a no-deal Brexit. If you currently use any the EU VAT refund electronic system, the EU’s VAT number validation service (VIES) or UK VAT MOSS, then there are a few things to take note of. AccountingWEB's tax editor Rebecca Cave has detailed these changes in another article. 

Replies (1)

Please login or register to join the discussion.

By [email protected] VAT Practice
21st Feb 2019 11:47

Interesting article and very timely. One point to note about TSP is that is ONLY applies to UK established businesses, non-established businesses operating in the UK are not eligible. The likely no deal Brexit could provide for a significant impact to those EU businesses, and some non Eu businesses, who are already registered for VAT in the UK, but have no permanent establishment here, for holding stock in the UK and, for those EU businesses that will be required to register for VAT in the UK under distance sales or consignment stock operations.

Thanks (1)