HMRC publishes no deal Brexit simplified customs procedure

Out-Law News | 06 Feb 2019 | 11:50 am | 2 min. read

UK VAT-registered businesses trading with the EU must register with HM Revenue and Customs (HMRC) so that they can benefit from simplified customs procedures should the UK leave the EU without a formal withdrawal agreement in place.

Registered businesses will be able to benefit from transitional simplified procedures (TSP) for customs for at least one year after Brexit, according to government guidance. TSP will allow businesses to transport goods from the EU into the UK without having to make a full customs declaration at the border. They will also be able to postpone paying any import duties, which will be collected by direct debit the month after import.

HMRC has written to over 145,000 UK VAT-registered businesses inviting them to register for TSP from 7 February 2019. It is also urging them to register for an economic operator registration and identification (EORI) number if they have not already done so, as they will need this to be able to use TSP.

The published plans relate to the import of goods from the EU into the UK only. They do not apply to the import of goods from Ireland to Northern Ireland.

Brexit expert Clare Francis of Pinsent Masons, the law firm behind, said that the plans were aimed at allowing trucks carrying imports from the EU to avoid delays at the border and drive straight off the ferries.

"However, whilst the potential for reduced congestion at the border will be welcomed, businesses need to be aware that they need to register and it will also ultimately mean doing two sets of paperwork," she said. "Businesses will need to change processes to achieve this and factor in the double handling - all at a time when they have limited resource and trained staff to complete the paperwork in any event."

"It is also important to note that this only applies to trucks coming into the UK. Trucks leaving the UK for the EU will not benefit from the same procedures and, therefore, there could still be significant disruption at ports given the departing traffic. Those departing trucks are, of course, those ultimately coming back into the UK, so without a simplified process which works both ways there is still the potential for significant disruption at ports if there is a hard Brexit. Businesses should continue to prepare for a hard Brexit and consider contingency plans," she said.

TSP registration will be open to businesses with an EORI number which are established in the UK, and which import goods from the EU into the UK. Businesses which import goods into the UK from elsewhere in the world, and which currently use customs software or employ a customs agent to comply with import requirements, should speak to their agent or software provider rather than register for TSP.

Once registered, businesses will be required to complete a shorter form at the point that the goods cross the UK-EU border, but will not be required to pay any import duties up front. They will need to send a supplementary declaration containing additional information to HMRC by the fourth working day of the month following the arrival of the goods into the UK. HMRC will then deduct any duties or taxes due by direct debit on the 15th day of the month after the goods arrive in the UK.

Businesses will also be required to have a financial guarantee in place for any deferred duties by 30 June 2019, according to the guidance.

HMRC will review TSP within six months of its introduction to see how it is working in practice, but anticipates that it will remain in place for more than one year. Businesses will be given at least 12 months notice before TSP is withdrawn, according to the guidance.