Brexit: Trade, customs and VAT FAQ
Below are a series of key questions you should be asking in your business to ensure you are prepared for Brexit.
Trade and customs
The customs authority facilitates the efficient and timely movement of goods. Revenue is the government agency responsible for customs controls in Ireland. In the UK, the HMRC is the body which provides this service. Trade in certain products, e.g. food and medicines, may be subject to further controls under relevant Government Departments. Companies trading with the UK should develop good contacts on customs and trade particularly with the local Irish officials dealing with your goods.
The customs regime applies if you are exporting goods to a third country, importing goods from a third country, or transporting goods through a third country. Customs duties, if applicable, will be required at the time of entry.
A third country for trade and customs purposes is a country which is not a member of the European Union, or any other agreement associated with lessening barriers to trade and movement of people such as the European Economic Area (EEA), Customs Union or European Free Trade Area (EFTA). As of 1 January 2021, the UK became a third country for trade and customs purposes.
- Carry out a Brexit impact assessment on your business.
- If you do not already have one apply now for an Economic Operator Registration and Identification (EORI) number from the Revenue Commissioners.
- If trading products of animal origin, register to access the online TRACES system with the Department of Agriculture, Food and Marine.
- Understand what is needed to fulfil a customs declaration.
- Decide who will do your customs declaration - someone who will be responsible within your company or an external customs agent.
- Identify the Customs CN code of every product you are trading.
- Identify any customs authorisations or simplifications that work for your business model and understand the approval process for same.
- Understand your obligations under the HMRC rules (UK authorities): different facilitations and Brexit arrangements are envisaged by HMRC.
- Understand your obligations under the Irish (EU) customs authorities - contact the Irish Revenue Commissioners with any Brexit related queries by emailing firstname.lastname@example.org.
No. A UK-issued EORI number will not be valid in the EU. You need an EORI number from an EU country if your business will be making declarations or getting a customs decision in the EU. Get this from the customs authority in the EU country where you submit your first declaration or request your first decision. In Ireland, you must apply for an EORI number through the Revenue Commissioners.
Export declarations are made online to the Irish Revenue Commissioners through the Revenue AEP System. Import declarations for all imports from outside of the EU (this will only apply to GB from 1 January 2021) should be made on the Revenue AIS system. However, Revenue are permitting the continued use of the AEP system for imports until March 2021. The accuracy of the data and document is hugely important- incorrect data and declarations will cause delays and increase costs for your business.
Further Revenue information on both systems can be found here.
As the carrier of goods, you are legally obliged to ensure an electronic customs Safety and Security declaration is submitted to Irish Customs. If you are moving goods using a truck and trailer you are considered the carrier and must therefore ensure that the declaration is made in advance of departing to/from GB. To do this, you must use a customs software package. Alternatively, a customs broker, acting on your behalf, can submit the declaration.
If you carry goods between Ireland and GB using a RoRo ferry service (accompanied or unaccompanied), a Pre-Boarding Notification must be submitted to Irish Customs. This notification must be submitted in advance of the goods leaving GB. The importer/exporter is responsible for ensuring that the PBN is submitted. The PBN may be created on behalf of the importer by you as the haulier or freight forwarder. Vehicles will not be allowed to board in GB unless they have a valid PBN.
Revenue’s Customs Roll-On Roll-Off Service provides the logistics providers/haulage companies with information on whether a vehicle can directly exit the port or if the goods need to be brought to customs for checking. This information is obtained with the PBN ID and is available 30 minutes prior to arrival of the ferry into Ireland. This information can be accessed by anyone in the supply chain.
Revenue recommends you visit the HMRC website for the latest information regarding HMRC requirements when bringing goods into the UK.
The Common Transit procedure is a useful simplification tool which can be used for goods moving from one member state to another through a third country (e.g. the UK). The UK has negotiated its membership of the Common Transit Convention post Brexit. This is a procedure that can be availed of if no deal on customs is agreed.
Availing of the procedure means that companies may only need to provide one customs declaration instead of four. A comprehensive guarantee (see below explanation) is required for companies to avail of the procedure.
It is important to note that the transit procedure is mainly processed online with the use of barcodes and a Movement Reference Number (MRN) which can be scanned on the ship to facilitate export or import. This requires some additional customs capabilities but means there is limited or no engagement with customs officials at the port of entry or departure.
Separate transit declarations would be needed if the loads are mixed with EU and UK goods. The transit procedure is the only way to move mixed goods – the Union goods (from the EU) will have duty suspended while in the third country therefore avoiding UK duties. Import procedures would be carried out in Ireland when they arrive. The general advice from Revenue is to avoid mixed loads if possible.
Customs must ensure that the description of the goods on the transit declaration is sufficient to ensure identification. Goods must be clearly separated and labelled to easily identify those goods, which it is proposed to place under transit. Otherwise the customs office of departure may refuse to place the goods under the transit procedure. The means of transport may be sealed by customs if the trader wishes it to be so. In such cases the trader should be advised that the seals may not be interfered with except by the customs authorities in other Member States.
If you operate a sea-going vessel or an aircraft that is carrying non-EU goods or EU goods that are part of a mixed load with non-EU goods into or out of Ireland, you must lodge a manifest using the eManifest system.
The eManifest system interfaces with the Arrivals and Automated Entry Processing (AEP) systems to process customs declarations lodged for importers and exporters.
You will find further information about eManifest in the Manifest Declaration Trader Guide.
A comprehensive guarantee is needed to avail of the common transit procedure and other customs simplifications. The guarantee ensures security, in the form of a customs guarantee, is put in place to cover potential or existing customs debt for certain customs procedures or facilities. The guarantee allows you to combine all your current customs bonds and guarantees. An authorisation from Revenue is necessary to use a comprehensive guarantee.
In order to apply for a comprehensive guarantee, you will have to meet specific criteria regarding:
- Financial solvency
- Compliance with customs rules
- Control of operations
- Practical standards of competency
You can apply for a comprehensive guarantee online through Revenue’s Customs Decision System.
Guarantees must be held in a financial institution in the EU, so if your company holds its guarantee in a UK bank, this must be moved to a bank within an EU member state. The onus is on companies to ensure this is done before the UK becomes a third country. Companies should, therefore, contact their banks in good time to facilitate moving guarantees. If your guarantee is already held by a financial institution in the EU, and not in the UK, then no change is required. If a company has AEO Status, then only a 30% guarantee of payment is required.
AEO stands for Authorised Economic Operator and is a certified authorisation issued by customs administrations in the EU. It certifies that a business has met certain standards and allows holders to benefit from certain trade facilitation simplifications. AEO will be suitable for some companies but not others, depending, for example, on the size of business and scale of trade. AEO is unlikely to suit SMEs due to the resources required to comply with the authorisation.
If your AEO status was granted in the UK (which may include subsidiaries in Ireland), then the status is no longer valid once the UK leaves the EU. AEO status granted in Ireland with subsidiaries in the UK must also check with HMRC to see if they will continue to recognise AEO status of the subsidiary in the UK.
Yes. There are several special procedures you can avail of to minimise the burden of customs procedures. Here you can find a detailed list of these procedures on the import side and on the export side from Revenue. To avail of these you will need authorisation from Revenue and, in some cases, a comprehensive guarantee.
The EU-UK TCA provides for zero tariffs and zero quotas on all goods for bilateral cumulation and other rules of origin requirements. The goods must be of EU origin for exports or UK origin for imports to claim the preferential tariffs of zero. Hence, tariffs and quotas may apply to some goods where they are neither. However, substantial new customs formalities will apply for trading with Great Britain.
For information on trade in goods with Northern Ireland, please consult our dedicated Tracker on the Protocol on Ireland / Northern Ireland.
The collection of tariffs (set at EU level) is usually based on a percentage of the value of the product. You can find the tariff rate of your product using the EU’s TARIC database. The tariff is then settled at the point of entry, however there are some arrangements, which must be agreed with Revenue in advance, where the immediate payment of the tariff is avoided:
- Inward processing: if goods are only in the country for additional processing and are then re-exported, then the duty payable could be suspended for the lifespan of the processing, once you qualify under the rules of the scheme. Similarly, if you temporarily export goods for processing or repair you may also be able to claim total or partial relief from import charges. More information on outward processing is available here.
- Deferred accounts: some importers use deferred accounts which facilitate cash flow and suspend payments until the following month. The goods can be released to free circulation from the deferred account- some importers have their own account and some use import agents. More information on deferred payment is available here on the Revenue website.
The UK is now part of the Common Transit Convention (CTC) which allows EU goods into GB if they are stored in an HMRC Customs-approved warehouse before onward transit to Ireland. The goods must not enter free circulation in GB to avoid additional tariffs on reimportation to Ireland. The transit declaration protects the custom status of the goods. Companies must seek approval from HMRC to avail of this facility and provide a financial guarantee.
Any wood packaging associated with goods (pallets, crates, boxes, dunnage) arriving from non-EU countries must be treated and stamped in compliance with the ISPM 15 standard. From 1 January 2021, these requirements apply to goods shipped from the UK. The mark is a stamp on the physical pallet consisting of three codes: country, producer and measure applied. There are derogations on these requirements. The Department of Agriculture, Food & the Marine (DAFM) is the body in Ireland that oversees adherence to this rule.
VAT and cash flow
UK imports (not including NI) to EU member states may be subject to Customs Duty, VAT and Excise Duty at the point of import. This means that UK goods could end up being more expensive in the EU market and might also create cash flow issues for business.
The Government has introduced a postponed accounting scheme which allows for deferment of VAT payment for companies to deal with cash flow issues stemming from Brexit. This is part of the Government’s Brexit contingency plan. Postponed VAT payment means that companies will not be required to pay VAT at the point of entry of an import and instead can delay payment. Postponed accounting will initially be introduced for all traders for a limited period to alleviate immediate issues, however following an initial period, at a time to be decided by the Minister for Finance, continued use of the postponed accounting system will depend on fulfilling criteria, which will be set by the Revenue Commissioners. For further information, see here.
The movement of duty-suspended excisable goods is managed through the Excise Movement Control System (EMCS). The Electronic Administrative Document (e-AD) contains details of the consignment and can be shared with warehouse keepers and economic traders in other EU member states.
Companies in Ireland will no longer be able to rely on a UK based notified body. Conformity assessment files and relevant certification (compliance, authorised representation) must be transferred to an EU27 Notified Body. You can identify EU27 notified bodies here. Sectors with sector specific product certification should review advice issued by their regulator and sector specific factsheets issued by the National Standards Authority of Ireland.
Yes, as of the 1 January 2021, the UK becomes a third country i.e. a non-EU country. For importing goods from a non-EU country (i.e., Great Britain), businesses have custom controls, may pay VAT, excise and customs, need an import declaration, an import safety and security declaration and may require a licence under prohibition and restriction rules.
For information on importing from the UK, consult the Revenue website here.
There is a clear distinction between Northern Ireland and Britain. Under the Protocol on Ireland / Northern Ireland, products placed on the market in Northern Ireland must continue to comply with the applicable EU legislation following the end of the transition period. For further information, see here.
For Britain, the UKCA marking will apply to most goods currently subject to the CE marking when selling goods in Britain. From 1 January 2021 the technical requirements, conformity assessment processes and standards used will largely be the same as they are now. Additionally, the UK has introduced an implementation period whereby the CE mark may be used in Britain until 1 January 2022 in most cases. To clarify if these applies to your products, see here.
There is a clear distinction between Northern Ireland and Britain. The EU has said that UK Notified Bodies will lose their status as an EU Notified Body including in a ‘no deal’ scenario. UK manufacturers are therefore obliged to use a Notified Body in the EU27 to obtain new CE markings for products entering the EU market. UK goods regulated under the New Approach Directives and placed on the EU market before Brexit will be recognised. Goods that require a conformity assessment will not be recognised however and need to be reassessed by an EU27 based body.
However, bodies established in Northern Ireland may continue to certify products, but these certificates issued by Notified Bodies will be valid only in Northern Ireland and Britain. By contrast, these certificates will be valid in the EU. For further information, see here.