Slide 1: Post Brexit Update & Discussion Webinar
Welcome to: Post Brexit Update & Discussion Webinar with.. Alison Horner Andrew Thurston Marisa Hut Jonathan Main Angela Keery MHA MacIntyre Hudson MHA MacIntyre Hudson Baker Tilly Netherlands MHA Moore & Smalley Baker Tilly Mooney Moore
Slide 2: Brexit: The outcome
Brexit Great news and welcomed by all UK and EU businesses. The impact of The outcome tariffs would have serious consequences on profit margins. We are looking today at what the reality of the Deal means for us all. What doesn’t change is that from 1st January 2021 all movements of goods between the
Slide 3: Customs and import changes: UK Customs Tariff
Customs and import changes UK Customs Tariff • www.trade-tariff.service.gov.uk • Two tariffs. The Online Trade Tariff and The Northern Ireland (EU) Trade Tariff. • Separate tariff for goods to Northern Ireland which are at risk of onward movement to the EU. • UK businesses selling to the EU and ROW
Slide 4: Customs and import changes: Postponed Import VAT accounting
Postponed Import VAT accounting Customs and • Change to declaration which means no import VAT is charged at the time import changes • Cash flow benefit to all UK VAT registered traders • Need to formally instruct your agent to declare the goods to PVA • No requirement to be authorised or apply to us
Slide 5: Incoterms
Incoterms Incoterms – remain very important and the fundamental starting point • This determines who will be the importer and responsible for Duty and VAT • DDP means the Seller is the importer – VAT registration consequences • EXW, FCA and DAP means the Buyer is the importer
Slide 6: Customs Obligations: Importer and Exporter
Customs Obligations Importer Exporter Customs Import declaration Customs Export declaration Common Veterinary Entry Commercial Invoice Document (CVED)* Packing List Import Licence* Export Licence* Origin evidence* * Depends on goods
Slide 7: Trade & Cooperation Agreement: Origin of goods
Trade & Cooperation Agreement: Origin of goods 7
Slide 8: Origin of Goods: Important Points
Origin of Important Points: Goods 1. No requirement for an EUR1 Preference Certificate 2. No monetary limit on Invoice Declarations 3. Full Bilateral Cumulation applied 4. Requirement to retain satisfactory evidence of origin 5. Allows for FTA with Turkey
Slide 9: Origin of Goods
Origin of Goods Origin • The agreement allows both the UK and EU to count inputs from the other party when assessing the origin of goods (Bilateral Cumulation). • It is the exporter’s responsibility to confirm origin. • Determined using the Rules of Origin.
Slide 10: Origin of Goods: Determining Origin
Origin of Goods Determining Origin 1. Use the 6-digit Tariff Heading 2. Refer to the relevant part of ANNEX ORIG-1: Introductory Notes To Product-specific Rules Of Origin https://assets.publishing.service.gov.uk/government/upload s/system/uploads/attachment_data/file/948119/EU- UK_Trade_and_Cooperat
Slide 11: Origin of Goods: Rules of Origin
Origin of Rules of Origin Goods There are two conditions that determine origin: Wholly Produced Sufficient Production
Slide 12: Origin of Goods: Wholly Produced
Origin of Wholly Produced Goods • Products are wholly produced (or obtained) in a member state of the EU. • The term applies mainly to products which occur naturally and to goods made entirely from them.
Slide 13: Origin of Goods: Sufficient Production
Origin of Sufficient Production Goods Usually, a finished product is classified in a different 4-digit tariff heading. However, there are exceptions to this rule. ➢ Some rules impose additional conditions, e.g. setting a maximum limit on the value of non-originating materials ➢ Some tariff headings
Slide 14: Origin of Goods: Sufficient Production
Origin of Goods Sufficient Production Minimal processes cannot be used, such as: a) preserving operations to make sure that the products remain in good condition during transport and storage. b) breaking-up and assembly of packages. c) washing, cleaning, removal of dust, oxide, oil, paint or other c
Slide 15: Origin of Goods: Sufficient Production example
Origin of Sufficient Production Goods For example: • Fruit Smoothie produced in the UK using fresh fruit from around the world (seasonally sourced) ➢ HS Code: 2009 ➢ Origin Rule: CTH, provided that the total weight of non- originating materials of headings 17.01 and 17.02 used does not exceed 40% of
Slide 16: Origin of Goods: Sufficient Production example
Sufficient Production Origin of For example: Goods • Hybrid motor vehicle manufactured in the UK ➢ HS Codes: 8702 to 8704 ➢ Origin Rule: MaxNOM 45% (EXW) and battery packs of heading 85.07 of a kind used as the primary source of electrical power for propulsion of the vehicle must be originating. • R
Slide 17: Origin of Goods: Evidence of Origin
Origin of Evidence of Origin Goods • Evidence for origin is different to the other UK trade deals. The two options are: ➢ Statement of Origin by exporter, or ➢ Importers Knowledge - allows an importer to claim a preferential duty rate based on their own knowledge about the originating status of impo
Slide 18: Cumulation
Cumulation Origin of Goods Under the UK/EU Trade agreement Bilateral Cumulation has been accepted. This means: UK Origin parts exported for processing A B EU Finished product incorporating UK Origin
Slide 19: Full Bilateral Cumulation
Origin of Full Bilateral Cumulation Goods • The TCA allows for an exporter to use both: ➢ originating materials or products, and ➢ processing or production carried out on non-originating materials • It means that even if an EU intermediate product is not itself deemed as originating from the EU, UK
Slide 20: Bilateral Cumulation example
Origin of Bilateral Cumulation Goods For example: • Tin of Chopped Tomatoes processed in the UK ➢ HS Code: 2002.90 ➢ Origin Rule: Production in which all the materials of Chapter 7 used are Wholly Obtained. • Rule requires tomatoes to be produced in the UK. • However, with cumulation, a UK producer
Slide 21: Bilateral Cumulation example
Origin of Bilateral Cumulation Goods For example: • Diesel Engine Manufactured in the UK ➢ HS code: 8408 ➢ Product: Diesel engine ➢ Rule: 50% MaxNOM • Maximum 50% non-originating content (parts) • However, with cumulation, EU content can be counted as ‘originating’. • If less than 50% of the ex-work
Slide 22: Origin of Goods: Tolerances
Origin of Tolerances Goods The TCA allows a tolerance of: • 15% by weight of the final product for agri-food goods • 10% by value of the value the final product for manufactured goods (except clothing and textiles). Textile and clothing products classified under HS50-63 are subject to specific toler
Slide 23: Tolerances example
Tolerances Origin of Goods For example: • Mixtures of dried fruit and nuts produced in the UK ➢ HS code: 0813.50 ➢ Rule: Production in which: I. all the materials of Chapter 8 used are wholly obtained, and II. the total weight of non-originating materials of headings 17.01 and 17.02 does not exceed
Slide 24: Evidence of Origin
Evidence of Origin Origin of Goods Wholly Produced Goods: Sufficient Transformation: Evidence of where grown/reared, such as a statement of origin Bill of materials/production For fish, the vessel used is records registered in the beneficiary country and is sailing under its flag Supplier’s declarat
Slide 25: Supplier's Declaration
Origin of Supplier’s Declaration Goods Two types: Single Declaration • Covers one consignment Long-term Declaration • Covers a period of up to 12 months.
Slide 26: UK-Turkey Trade Agreement: Origin
UK-Turkey Trade Agreement: Origin 26
Slide 27: Trade deal with Turkey
Origin of Trade deal with Turkey Goods • No requirement for an ATR1 – Statement on invoice only. • Goods in ‘free circulation’ in Turkey were accepted as originating for preferential purposes – no longer the case. • Imports from Turkey must meet the rules of origin as per the trade agreement. These
Slide 28: Further Reading
Further Reading: Origin of Goods Full CTA text: https://assets.publishing.service.gov.uk/government/uploads/system/uploads /attachment_data/file/948119/EU- UK_Trade_and_Cooperation_Agreement_24.12.2020.pdf HMRC Rules of Origin Guidance: https://www.gov.uk/government/publications/rules-of-origin-for-
Slide 29: Customs Regimes
Customs Regimes – Customs regimes Customs warehousing – Avoids Double Duty hit. Beneficial for UK companies who import goods into the UK for onward dispatch to EU – duty only once when goods finally imported into the EU. Still important for ROW imports that don’t meet Origin rules. Inward Processing
Slide 30: How does Brexit impact GB businesses: VAT and B2B trade in goods
VAT and the B2B trade in goods How does Brexit impact GB businesses trading with the EU? • Export from GB – who? • Import in EU – who? • EU EORI number • EU import duties if goods not originate in GB or EU • Import VAT deferment? • Required fiscal representative? • VAT number in EU country? • No leg
Slide 31: How does Brexit impact EU businesses: VAT and B2B trade in goods
VAT and the B2B trade in goods How does Brexit impact EU businesses trading with the GB? • Export from EU – who? • Import in GB – who? • GB EORI number • UK import duties if goods not originate in EU or GB • Postponed import VAT accounting • VAT number in GB? • No legal entity requirement in GB • Be
Slide 32: How does Brexit impact GB businesses: VAT and B2C sale of goods
VAT and the B2C sale of goods How does Brexit impact GB businesses trading with the EU? • Distance selling regime will no longer apply if goods are sent to the EU • All supplies of goods coming from GB to the EU will be an export from GB and an import in the EU • Payment of the EU import VAT and imp
Slide 33: How does Brexit impact EU businesses: VAT and B2C sale of goods
VAT and the B2C sale of goods How does Brexit impact EU • Distance selling regime will no longer apply businesses if goods are sent to GB trading with the • All supplies of goods coming from the EU to GB will be an export in the EU and an GB? import in GB. • Is the supply below £135? New rules apply
Slide 34: How does Brexit impact UK businesses: B2C e-services
B2C e-services How does Brexit impact UK businesses trading with the EU? • Electronic services (online media, apps, streaming, online books, online games) • VAT due in EU countries of consumers • Registered for MOSS in U.K. before January 1, 2021? → change asap to other EU country, as MOSS no longer
Slide 35: How does Brexit impact EU businesses: B2C e-services
B2C e-services How does Brexit impact EU businesses • Electronic services (online media, apps, trading with the streaming, online books, online games) • VAT due in non-EU country of consumers: UK? UK • B2C to UK consumers: UK VAT due → Register for VAT in UK!
Slide 36: Other VAT issues? VAT simplification rules no longer applicable for GB
Other VAT VAT simplification rules no longer applicable for GB issues? Ireland Northern • Triangular transactions, including the simplified triangular scheme, in case GB is country of dispatch or receipt of the goods • Call-off stock simplification for goods sent from the EU to GB (or vice versa) •
Slide 37: Other VAT issues? VAT simplification rules no longer applicable for the UK
VAT simplification rules no longer applicable for the UK Other VAT issues? Ireland Northern • VAT refund claims submitted by UK companies in the EU or by EU companies in the UK: companies can still use the EU VAT refund system to claim VAT on expenses incurred before January 1, 2021, until 11PM on M
Slide 38: Northern Ireland
Northern Ireland Northern Ireland NI Protocol applies to trade with NI post 31/Dec. - Withdrawal Agreement – October 2019 , designed to protect the Good Friday agreement/ Free Trade Island of Ireland. - NI benefit from any UK Trade deals - NI is part of EU Single Market follows EU regulations on goo
Slide 39: Great Britain to Northern Ireland
Great Britain to Northern Ireland Northern • Food and agricultural products – and all Ireland Northern Ireland sanitary and phytosanitary – will be subject to specified processes – 3-6 month delay. ( Authorised Traders) • UK authorities apply EU customs rules to goods entering NI that are likely to
Slide 40: Great Britain to Northern Ireland: UK Trader Scheme
Great Britain to Northern Ireland Northern Ireland Northern Ireland • UK Trader Scheme-Eligible businesses can register, • No Tariff’s on goods sold to or provided for final use by end consumers in NI/ UK • Tariff only due on “at risk “ goods • Claim a Waiver for duty on goods (“at risk”) - de minim
Slide 41: Northern Ireland to Great Britain
Northern Ireland to Great Britain No Exit Declarations required on qualifying Northern goods. Ireland Northern Ireland 2021- Qualifying Traders Anti-avoidance provisions re EU goods routed through NI to avoid UK Customs, Northern Ireland / EU No new paperwork; no tariffs, quotas or checks on rules o
Slide 42: Northern Ireland - VAT on Goods B2B and B2C
Vat on Goods B2B and B2C Northern Ireland NI/GB • Continue to account for all sales across the UK through your UK - Vat on Goods Northern Ireland single VAT return. • VAT accounted for as is now on sales to GB continue to charge VAT and show on invoice etc. • Moving own goods GB to NI only – account
Slide 43: Checklist
ANALYZE YOUR SUPPLY CHAIN AND PRICING – STILL UP TO DATE POST BREXIT? Checklist CHECK YOUR PARTNERS IN CUSTOMS, LOGISTICS AND TAX REPS – ALL SET? ANY CHANGES REQUIRED? CHECK THE CONTRACTS CLOSED WITH ALL PARTIES RELEVANT FOR YOUR BUSINESS ARRANGE ALL FORMALITIES – ADJUST FORMALITIES IF REQUIRED … KE
Slide 44: Post Brexit - How to implement Brexit
Post Brexit - How to implement Brexit Implementation We are here to support you – Post Brexit Check. Looking at supply chains, systems, paperwork required, VAT registrations, PVA and invoicing. EU VAT registrations and EU VAT compliance. Customs support – Navigating the Origin rules and implementing
Slide 45: Contact us
Contact us Alison Horner Marisa Hut Angela Keery MHA MacIntyre Hudson Baker Tilly Netherlands Baker Tilly Mooney Moore Alison.horner@mhllp.co.uk m.hut@bakertilly.nl angelakeery@bakertillymm.co.uk Andrew Thurston Jonathan Main MHA MacIntyre Hudson MHA Moore & Smalley Andrew.Thurston@mhllp.co.uk jonat