AIMS Accountants for Business
AIMS Accountants for Business
Sadly, if you trade with the European Union, the answer is most likely, yes it does. From the first day of 2021, trade with the EU is now largely treated in the same way they do for countries outside of the EU.
What does this mean for UK’s businesses looking to trade with the EU now the freedom of movement of goods is over? Some of the most important points for businesses to consider are as follows:
Get an EORI number – businesses moving goods in and out of the UK must have one and must start with letters GB. If the one you have doesn’t, you must apply for a new one. It can take a week after applying to arrive.
Imports – You have probably read that there are now customs declarations that need to be completed, duty and VAT to be paid when the goods enter the UK from the EU. The trade deal in theory means there should not be any duty, however it is governed by complicated rules. Therefore, it may be payable depending on what is being imported. Duty is, unfortunately, a sunk cost that cannot be recovered.
VAT (Value Added Tax) – is payable at the border and can be recovered on the businesses VAT return. In order to help business with cash flow, the government has introduced a system called “postponed accounting”, which is available to all VAT registered business. This means rather than paying VAT at the time the goods enter the UK, it allows businesses to account for the VAT as a reverse charge entry on their next VAT return.
Freight forwarders – can help you with customs declarations which can be difficult and to avoid you making any mistakes.
Exports – Regardless of whether your customers are other businesses or consumers all exports to the EU are now zero-rated. However, they will be subject to duty and VAT when they arrive to the country of destination, this could cause hold ups and delays for the customer. There are some options that you can look at to smooth the process including covering the cost of the foreign VAT (which would benefit consumers) or registering for VAT in another EU county.
Northern Ireland will use the Northern Ireland Protocol which has different rules for the supply of goods and services but remain unaffected for domestic sales between GB and NI.
Henry Ejdelbaum comments “AIMS has seen that this is an area that is confusing many clients, as the rules are not just new but also complicated. We have been working hard to make sure that our clients don’t get caught out and have worked with many of our clients to make sure that they have as much in place as they can for Brexit”.
Henry Ejdelbaum is MD of AIMS Accountants for Business, who have 200 local accountants based across the UK and specialise in helping small business owners with their tax affairs.
ENDS
For further information please contact:
Johan Da Silva
AIMS Accountants for Business
020 7616 6634
Notes to editors:
About AIMS Accountants for Business
Established close to 30 years ago, we are the largest independent national network of accountants. We help ambitious and hardworking business owners throughout the UK with their accounting needs, and our focus is purely on providing the highest quality of advice to SMEs, leaving them free to focus on and develop their business.
