How the Ready for Customs Grant is helping Declaron become the go-to solution for customs

 

Declaron is an innovative new customs clearance solution that saves you time and money by enabling you to create and self-manage your own customs declarations online.

 

Their team of customs clearance experts are available to ensure you have all the support you need to be able to manage declarations directly.

This radical new solution has been custom designed to support businesses importing from or exporting to the UK post-Brexit.

It saves you time on paperwork, enables you to clear your goods faster, and keeps you Revenue compliant and audit ready.

Errors on customs declarations are the number one reason goods get blocked at the moment but to date, Declaron customers have had no red or orange routings due to declaration errors.

 

Disruptive technology – smoother trade

Declaron is disrupting traditional customs procedures in a way that eases the administrative burden immeasurably.

The technology-based customs clearance innovator was set up in 2020 as a joint venture of business advisory firm BDO Ireland and Kerry based Fexco, a payments and fintech company.

Its online customs clearance service helps Irish businesses to manage the exponential rise in documentation that has arisen because of the UK’s departure from the EU.

“When a ‘hard Brexit’ started coming up as a real possibility two years ago, it became very clear, very quickly, that the market wasn’t capable of meeting the needs of businesses,” says Michael Nolan, chief executive of Declaron.

With the number of customs declarations due to be lodged with Revenue predicted to rise from 1.6 million a year to 20 million, a shortage of clearance agents was a mounting source of concern to Irish businesses.

“Estimates indicated we were short of some 3,000 customs agents if we were to be able to cope as a country with the amount of paperwork coming,” explains Nolan.

 

Let technology take the strain

Declaron, which combines BDO’s financial advisory expertise with Fexco’s technical strengths, took an innovative approach to the problem.

“For us it was a case of asking ‘how do we apply 21st century solutions to a 19th century problem?’ because customs declarations hadn’t progressed significantly in over 100 years,”

Declaron uses cloud-based technology, accessed over the web, that does not require any integration of software for users, or significant technical expertise in-house, to manage their customs paperwork.

“Even with great technology, customers will still be in need of customs expertise, which is why we also have customs experts available to talk to them from 7am to 7pm, seven days a week,” he says.

 

Keeping customers compliant

That service extends to 24-hours a day care in the case of issues with shipments on the move – when you need that human touch – but Declaron minimises the risk of goods ever getting ‘red routed’ in customs.

That is what makes the ground-breaking platform so valuable: unless all the paperwork is complete and correct, Declaron’s system will simply not accept it, providing enormous peace of mind to customers.

“Our systems demand compliance,” says Nolan. Using Declaron leaves companies audit-ready too. “We are the guardrails.”

 

Highly scalable solution

Because it is technology based, Declaron is disrupting the traditional customs agent model in a highly scalable way.

That is helping to reduce concern that Ireland will not have enough customs agents to cope with demand.

That is good because the snarl ups seen in ports in early January should be taken as a final warning of the need to prepare properly for customs, he cautions.

A combination of pre-Christmas stockpiling, lack of demand because of Covid-19, and the UK waiver of certain goods until June, are all still artificially impacting trade flows.

“We know a number of people were having trouble getting through to their customs agents in January,” he says, pointing out that was at a quiet time in terms of the movement of goods.

When stockpiles run out, the UK waivers end, and normal trade flows resume, it is vital that Irish businesses are fully prepared.

Find out how Declaron can keep your goods moving in customs-ready fashion

 

Making the most of the Ready for Customs Grant

To help build its team of customs agents, Declaron availed of Enterprise Ireland’s Ready for Customs Grant.

The grant provides funding of up to €9,000 for every new or redeployed full-time staff member employed to handle customs in-house, or €4,500 for a new part-time staff member.

This new support is open to companies that are directly engaged in business activities to, from or through the UK and which require new or increased customs clearance capacity.

“I would recommend the Ready for Customs Grant to any company that uses customs declarations. If help is needed to support customs declarations, it is important to know there is a grant available for it,” says Nolan.”

Declaron, which has a staff of 35, has used the grant five times.

“We have used it to hire the customs clearance agents we need to help our customers and to answer their questions, because we know that customs is scary. It’s why some people have tended to bury their head in the sand and just put it off,” he explains.

“My advice would be to look at your business’s customs preparedness straightaway. Don’t wait until there is a truck sitting outside your door – do it now.”

 

Find out how Enterprise Ireland’s Ready for Customs Grant can help your business

 

 

 

 

Brexit: The key takeaways for Irish firms

The conclusion of the EU-UK Trade and Cooperation Agreement (TCA) was a significant achievement for all concerned. The historic deal provides for tariff- and quota-free trade between the EU and the UK and protects Ireland’s place in the Single Market. It also establishes a foundation for a strong future partnership and positive engagement and co-operation between the EU and the UK in the period ahead.

 

Of critical importance is the fact that Ireland’s €92 billion trade in goods, services and agrifood with the UK will not be subject to unwelcome tariffs.

Another very important dimension of the TCA is the arrangements it puts in place for international connectivity, including aviation and road haulage, co-operation on cross-border law enforcement, energy links, trade in services as well as goods and a range of other important areas such as UK involvement in EU programmes, including the Horizon research programme and PEACE PLUS.

In addition, a legally secure bridging mechanism has been put in place to allow for the continued smooth flow of data between the EU and the UK. This avoids potential disruption to current arrangements where companies in Ireland have payroll and other processes carried out in the UK. It also enables Irish service providers to continue serving UK customers, with no requirement to adjust existing arrangements.

The arrangements for air travel mean point-to-point flights between the UK and EU destinations, including Ireland, can continue to operate smoothly. This will help maintain vital trade and business corridors between Ireland and the UK.

There are also new arrangements on ownership and control, and marketing cooperation between airlines. The impact of these arrangements has already been seen, with Ryanair moving to restrict the voting rights of UK-based shareholders.

The UK’s departure from the Single Market does mean new restrictions on British airlines, with point-to-point routes between EU destinations no longer open to them, for example.

The arrangements on road connectivity are particularly welcome as they make explicit provision for the unique situation of the island of Ireland, and the rights for our haulage sector are protected as much as possible. The agreement provides for point-to-point access between the EU and the UK, which covers the majority of traffic between Ireland and the UK.

Irish hauliers will also enjoy some cabotage rights within the UK. These will allow hauliers to deliver a load to one destination in the UK and then carry goods to another destination there. North-South cooperation on road haulage is protected, while Irish hauliers will retain the right to transit through the UK to third countries outside the UK, such as Switzerland.

But tariff- and quota-free trade does not mean barrier-free access. While the TCA is fundamentally in Ireland’s interest, it cannot and does not replicate the status quo which existed prior to Brexit. The UK’s decision to leave the EU means that the EU-UK relationship cannot be as close as it was before 1 January 2021.

From a practical point of view, this means that Irish goods are now subject to customs checks and controls on entry to the island of Britain. This applies to all goods destined for the UK market or transiting Britain en route to the EU or other markets.

To illustrate the scale of the challenge this presents for Irish business, it is estimated that the number of declarations made by Irish firms each year will increase from 1.7 million a year to more than 20 million as a result of Brexit

A great many Irish businesses have already prepared for this new situation and have put in place arrangements to cater for it. Those who are not yet ready need to act now if they are not to suffer severe disruptions to their business.

The first step in the preparation process is to obtain an EORI (Economic Operators Registration and Identification) number. This is a European Union registration and identification number for businesses which undertake the import or export of goods in or out of the EU. Companies can register for a number through Revenue’s EORI online registration service; the process is very straightforward and can be completed in minutes.

After that, companies need to determine the commodity code for the product or products they are exporting. Companies can find detailed lists of these codes on the Revenue website (revenue.ie).

The next step is to decide who will be handling the customs declarations. In many cases, firms will use logistics partners or customs brokers to do this, but SMEs may well decide to do it themselves either to reduce costs or due to difficulties in finding a suitable partner.

Making declarations online is known as Direct Trader Input (DTI) and requires importers, exporters or their agents to have dedicated software making electronic declarations to the Automated Entry Processing (AEP) system. To do this, companies need to register with Revenue and obtain a digital certificate to make declarations to the system.

Several software products which can handle electronic declarations are available on the market and many of them can interface with ERP and accounting software to extract the data required for the declarations.

Accuracy is absolutely critical. There are more than 50 data points in a customs declaration and a slight error in any one of them will slow down or stop the shipment.

Where companies do decide to use a partner to handle customs on their behalf, they should not rely on business carrying on as usual in the early months of the new arrangements. The massive increase in the volume of declarations will put even the largest and best-prepared operators under strain. Companies need to talk to their partners and ask them if they are ready, if they have taken on more staff, and how high up their priority list they are.

For larger exporting companies, there is the option to apply for Authorised Economic Operator (AEO) status with Revenue. This allows them to self-certify exports and receive priority treatment when their goods are crossing borders. Traders that have registered under Authorised Economic Operator schemes will be mutually recognised in the EU and UK under the TCA.

At another very practical level, businesses must prepare for delays in supply chains, both for imports and exports. The massive traffic jams witnessed at Dover and Calais and other English Channel ports before Christmas gave some indication of what could happen in worst-case scenarios. Many importers and exporters will have to increase stockholdings to cater for such delays and this will require them to invest in warehousing and other storage facilities as well as potentially change the terms of trade with their customers and suppliers.

Those exporters who are not yet ready for the new customs regime should use the traditionally quiet period at the beginning of the year to prepare for it. Enterprise Ireland has a suite of supports available to help firms get ready and an excellent starting point in the process is the online Brexit Readiness Checker which delivers a personalised report that highlights any gaps in preparations, identifies priority areas for attention, and gives details of where to find help and support, all in 15 minutes.

The EU-UK Trade and Cooperation Agreement (TCA) may not have replicated the frictionless status quo which has existed up until now, but it certainly represents a vast improvement on what a no-deal Brexit would have meant for Ireland and Irish businesses. As such, the challenge now is to make the most of that and take advantage of the tariff- and quota-free access to the UK market which the deal has delivered.

 

Assess your Brexit readiness with our Brexit Readiness Checker

CE marks authorised by UK will no longer be valid within the EU

From 1st January new rules will apply to those exporting to GB, as well as those buying from it

 

That’s the date on which the Brexit transition period ends, and the UK finally leaves the EU.

New Year’s Day is a Red Letter one for Irish businesses trading with the UK. It marks the end of the Brexit Withdrawal Agreement transition period and the beginning of the UK’s new status as a Third Country, outside the EU.

Regardless of the outcome of trade talks, this means:

  • Significant changes to the certification rules governing Irish exports to the UK
  • New certification requirements for Irish manufacturers bringing parts in from the UK
  • Greater legal responsibility as former Irish ‘distributors’ of UK goods become ‘importers’ to the EU

 

 

Get properly certified

“If you receive products from the UK, you should assess your responsibilities under EU law now.” – Mary White

Irish companies exporting to the UK must take steps now to ensure their products are correctly certified. Failure to do so could see goods impounded.

Currently, goods that are compliant with EU legislation carry the CE mark. However, if your product’s CE mark is authorised by a UK standards assessment body, known as Notified Bodies, that certification will no longer be valid within the EU.

“If your organisation relies on certificates, licenses or authorisations for goods or services which have been issued by UK Authorities, or by UK-based Notified Bodies – or are held by someone established in the UK – these will no longer be valid within the EU, post-Brexit,” warns Mary White, Head of the Brexit Unit at the National Standards Authority of Ireland (NSAI).

Companies in such a position need to transfer certification – or seek new certification – from a Notified Body or Authority within the EU-27 member states. “The sooner you do it the better,” she says.

 

New responsibilities

From 1st January the legal rules surrounding some business activities will change.

Anyone who previously acted as a distributor of goods originating in the UK will now become an importer of those goods and take on significantly more responsibility for ensuring they conform to EU standards. That applies for component parts, as well as finished goods.

“If you receive products from the UK, you should assess your responsibilities under EU law now.  It is likely that post-Brexit, if you buy goods from the UK you will be considered as an importer for the purposes of EU product legislation.  This means you will have another set of obligations under EU law depending on the sector,” says White.

If you import from the UK, you will now be required to keep additional information on file too, so engage with your UK suppliers to obtain this information as soon as possible.

 

 

CE becomes UKCA

“Remind your UK customers that they will become ‘importers’ under UK law.” – Mary White

Come 1st January Irish products placed on the UK market will be subject to UK legislation.

New UK regulations stipulate that any product that requires a Declaration of Conformity will have to have this carried out by a UK Approved Body, as opposed to an EU-27 Notified Body.

To be traded in Great Britain the goods must be marked not with the CE mark but with a new mark the UK has introduced, UKCA (Conformity Assessed).

Until 31st December 2021, CE marked products will still be allowed to be placed on the UK market.

“Remind your UK customers that they will become ‘importers’ under UK law, and they will be required to be able to access a copy of your product’s technical file. You should prepare this information now, so that it will be available to your UK customers after 1st January 2021,” says White.

 

Regulatory divergence 

In January the UK will have UK legislation coming into force similar to current EU legislation. However, “What they don’t say is whether they will update this legislation when the EU amends its legislation,” says White.

At present there are 32 pieces of EU legislation covering manufactured products here, in the form of both directives and regulations.

Several EU directives currently under review, including the Machinery Directive. “The UK will not be obliged to update their legislation as they will not be bound to EU rules, hence, there will be divergence,” she warns.

 

Act now 

“My message for Irish manufacturers that require their product to be certified under a particular piece of EU legislation is to first, ensure that your certification is carried out by an EU-27 based Notified Body from the 1st January 2021.” – Mary White

If you use a UK Notified Body, check to see if it has established itself in an EU-27 Member State, as some have relocated, she points out. In Ireland there are now 16 Notified Bodies who undertake conformity assessments, up from three just two years ago.

If yours hasn’t relocated to the EU-27, check the EU NANDO (New Approach Notified and Designated Organisations) website to look through its database of 1500 Notified Bodies  [https://ec.europa.eu/growth/tools-databases/nando/]  to find an alternative.

 

Transfer your files

“From 1st January, UK Notified Bodies can no longer certify your product and issue the CE mark,” says White.

“You can transfer your existing technical file from the UK NB to an EU based NB up until the 31st December. Otherwise, you will have to get your product recertified, and this can take several weeks to transfer.”

Remember:

  • if you currently CE mark your product under EU rules, you will still have to, post Brexit.
  • if you rely on a UK Notified Body for the certification of conformity that underpins your CE mark either you will need to transfer your technical specification files from your UK Notified Body to an EU-27 one, or
  • you will need to obtain a new certificate that has been issued by an EU-27 Notified Body
  • if you do this post-Brexit, you will automatically be required to start with a new application.

 

 

EU Declaration of Conformity 

Make sure to have your Declaration of Conformity documentation in order, a requirement for CE marked goods.

“If you are an Irish manufacturer and are currently importing a CE certified component from the UK after the 1st January, you are now importing from a Third Country,” reminds White.

A copy of the Declaration of Conformity for the certified component needs to be available at the point of entry, demonstrating that the product has been certified by an EU-27 Notified Body.

All products certified by a UK Notified Body must be placed on the market before Brexit occurs or else will need to be recertified.

As long as the certified product is in transit, and an invoice has been generated by the Irish manufacturer or importer of the goods before 11pm on 31st December 2020, “this product can still be placed on the EU market, even if it does not arrive until March,” she points out.

 

EU Declaration of Performance

Goods being placed on the market in England, Scotland and Wales will have to have UKCA marking, with conformity assessment carried out by a UK approved body.

As well as a UKCA mark, such goods will need UK Declaration of Performance documentation to support them.

There is a transition period in which CE marking will still be permissible, giving Irish companies time to get their UK certifications in order.

The UKCA mark will be required for industrial products from January 2022, and for medical devices from July 2023.

Although a new mark CE UK (NI) is also being introduced, EU rules will continue to apply to goods moving to and from Northern Ireland, with no significant changes there, she says.

 

Finally, don’t trip over a pallet

ISPM 15 is an international phytosanitary measure developed by the International Plant Protection Convention (IPCC) that sets down standards for the treatment and marketing of wood packaging material (WPM) such as the pallets and crates used in international trade.

Under EU Regulations, certain minimum standards apply and those that have attained the requisite standard are heat treated and stamped.

Currently ISPM15 is a requirement for WPM entering the EU from Third Countries. It does not currently apply to EU UK trade.

However, from 1st January 2021 the UK becomes a Third Country and ISPM15 becomes a requirement.

“As of now, there are in excess of 100 million pallets in the UK, 90% of which do not have this mark,” says White. As all WPM may be subject to official checks either upon or after entry to the EU, now is the time to discuss this issue with your UK trade partners.

 

Asses your Brexit readiness with our Brexit Readiness Checker

Ready for Customs grant – Emerald Freight Express

 

Securing Enterprise Ireland’s new Ready for Customs grant helped ensure Emerald Freight Express, one of Ireland’s leading freight forwarders, was fully prepared for the UK leaving the EU.

For Emerald Freight Express it’s likely to be a busy time, moving goods for client companies all around the globe, including into and out of the UK, says Anna Barden, Financial Director. Securing the grant from Enterprise Ireland helped bring the company to this position of strength.

“We’re a one-stop-shop for air, sea and road, import and export, including warehouse and 3PL or ‘third party logistics’”, she explains.

The company has a highly trained team of 28 and has been a certified Authorised Economic Operator (AEO) since 2011. As a trusted provider of freight forwarding services, it helps its clients to ship their goods ar ound the globe. Right now, however, all eyes are on the UK and what 1st of January will mean for goods being shipped to, from and through the UK.

Keeping focused

Not alone is Emerald Freight Express set to provide new customs services to new customers, it has expanded the customs services it offers existing ones too, she points out.

To ensure it could continue to provide a premium service to all customers, Emerald Freight Express had to invest heavily in personnel, office space, and IT systems.

“When the Brexit vote happened, we had a huge volume of enquiries from people panicking about what they were going to do,” says Anna Barden.

The team worked with each caller, helping them to determine the decisions they needed to make about things like who was going to handle customs clearances and the need to get an EORI (economic operators’ registration and identification) number or register for UK VAT.

“Unfortunately, this has been a very challenging year for all of them because of Covid, but it is important to stay focused and put the right processes in place. There is still a little window of time in which to do it but everybody needs to have their house in order before 31st December,” she explains.

The fact that trade negotiations between the UK and EU are still going on makes no difference, she points out. New customs procedures will still apply regardless of what happens in terms of tariffs and duty.

“From 1st January customs declarations and POOs, or Proof of Origins, will be required,” she points out. Importers and exporters will have to be fully compliant with the new requirements.

Securing a Ready for Customs grant from Enterprise Ireland helped Emerald Freight Express to make the internal changes it needed to make in order to be Brexit ready.

One of the first steps we took was to set up a new customs brokerage department, to handle client queries. It redeployed two key employees to manage this specialist division and hired four new recruits to staff it.

It then hired two new staff to fill the vacancies caused by the redeployment of managers, upgraded its IT systems and invested heavily in training, so that every single member of the team could develop the new skills required.

At the same time as Emerald Freight Express was making these investments, it had to expand its offices to cope with Covid-19 social distancing requirements.

Challenging year

All in all, it has been a hugely challenging year. “With recruitment costs, IT costs and training costs, we have had an enormous outlay in terms of getting ready for Brexit. But it was really important to ensure we continued to service our existing clients, and new ones, to the highest standards,” says Anna Barden.

“This was an investment we had to make. The Ready for Customs grant allowed us that cushion we needed to get it done.”

While there will be a steep learning curve for everyone in January, as well as, most likely, delays, the management team at Emerald Freight is already looking beyond the challenges to the new opportunities Brexit will give rise to.

For a start, clients for whom it previously looked after only Far East or US freight are now coming to it to handle their UK business as well.

“With every challenge comes opportunity,” says Anna Barden. “At the same time, you have to be able to stand over what you promise and be able to deliver on what you say. We now have the talent, the systems and the tools in place to do just that.”

She recommends other businesses looking to get ready for customs should check out Enterprise Ireland’s new Ready for Customs grant, which provides up to Euro 9000 for every new full-time staff member employed to handle customs or half that amount for a new part-timer.

“The application process for the grant was very straight forward and we got confirmation of approval within two weeks,” says Barden.

“We have the skills and the systems in place now to deal with anything that is going to happen on 1st January.”

 

Learn more about The Ready for Customs grant here

New UK importing rules: Establishing a UK Presence

A recent Enterprise Ireland webinar outlined the key rules around customs that will come into effect when the Brexit transition period ends and discussed issues around establishing a UK presence. 

 

On 1 January 2021, the free movement of goods between the UK and Member States of the EU ends and the UK will become a ‘third country’.

Margaret Whitby, Head of Stakeholder Engagement at BPDG and Claire Wilson, Stakeholder Engagement at HMRC Customs and Borders Unit gave an overview of how the import/export rules will change.

“If you currently move goods to or from GB or EU, you only need an invoice and a transport order. After the end of the transition period the process will start with an export declaration and when you arrive at the ports in Great Britain you’ll need to have import declarations. So you will have up to nine additional procedures to take into account, depending on your role in the supply chain. These rules will come into play no matter what agreement is reached,” explained Whitby.

 

Staged introduction

Recognising the impact of coronavirus on businesses’ ability to prepare, the UK Government has decided to introduce the new border controls in three stages up until 1 July 2021 for UK imports.

“Most traders will not have to make import customs declarations on 1 January 2021 but those importing controlled goods (such as excise goods) will be expected to follow full customs requirements,” said Whitby. ​

“The requirement for safety and security declarations on import – Entry summary Declarations (ENS) will also be waived for six months.”

On 1 January 2021 the UK will join the Common Transit Convention (CTC) in its own right which allows duty to be suspended when moving goods across CTC member countries. EU goods arriving in the UK under transit will need to complete Office of Transit formalities.

“We intend to use a digital model to automate this process, making early use of the Goods Movement Vehicle System, which will support the Pre-Lodgement model for both imports and exports from July 2021,” said Wilson.

On 1 April 2021 the UK will phase in additional import documentation for animal products and on 1 July 21 it will implement full customs requirements and border checks.

 

General requirements and preparation

A UK importer and exporter will need to have an Economic Operators Registration and Identification (EORI) number (goods not services) issued by the UK and EU importers and exporters must have an EORI number issued by an EU Member State.

“You also need to agree terms and conditions with your UK importer and ensure that responsibility for customs checks, duties, verification and release regimes is clear,” said Whitby.

Since the announcement of the EU-UK Trade and Cooperation Agreement (TCA), there will be no quotas or tariffs applied on trade between the EU and the UK.

 

Declaration requirements from January 2021 to July 2021

Claire Wilson gave details about declaration requirements for imports and exports.

“Traders bringing goods from the EU to the UK will need to declare their goods to customs. Goods must be declared in advance of crossing if moving through a listed Ro-Ro port or a location without existing systems.

“Traders moving non-controlled goods to the UK will be allowed to declare their goods by making an entry into their own records. They will be required to submit this information via a supplementary declaration within six months of import and pay the duty via an approved duty deferment account at that point,” explained Wilson.

Traders moving controlled goods will need to make a frontier declaration. If the goods are coming in through a location without systems that would allow the trader to notify HMRC that goods have been imported, the trader must manually arrive the declaration in HMRC systems (including entry to the Excise Movement and Control System for excise duty suspended goods) by the end of the working day following the physical crossing.

The UK is moving to full customs control for exports from 1 January so traders exporting goods from the UK into the EU will need to submit export declarations and safety and security information.

If goods are moving via a non-inventory linked location the customs declaration will need to be submitted as “arrived” while the goods are at the trader’s premises. HMRC will notify the trader if the goods have “permission to progress” or need to be taken to a facility for a check.​ If goods are moving through a location with existing inventory systems the standard Rest of World export model will be followed.

From 1 July everything moves to Rest of World procedures.

“We’re working now with border locations to develop how they will manage goods moving through. Some will use the temporary storage model, or the newly developed Pre-lodgement model, some will use the new IT system called the Goods Vehicle Movement Service to support the Pre-lodgement model for both imports and exports and to facilitate Transit movements,” said Wilson.

 

VAT and Excise

The UK Government announced that from 1 January 2021 postponed VAT accounting will be available to UK VAT registered businesses (including Non Established Taxable Persons) for imports of goods from all countries.

On 1 January 2021, the Rest of World rules will apply to imports and exports of excise goods moving between the UK and the EU.  Businesses will need to complete customs import and export declarations using the relevant codes for duty paid or suspended goods. If businesses move duty suspended excise goods to and from a tax warehouse to the place they enter and exit the UK they must use the UK version of Excise Movement and Control System (UK EMCS). UK EMCS must also be used to move duty suspended excise goods from UK warehouse to UK warehouse.

 

Setting up a UK entity

In the second half of the webinar Gerry Collins, Managing Partner, and Ruth Potter, Tax Partner, at Ecovis, a company which is highly experienced in working with businesses internationally, spoke about creating a UK presence.

 

Importing into the UK as a non-UK business

“Goods moving from the EU into the UK will be regarded as imports and will be subject to import VAT,” explained Potter.

“Where the UK customer is unwilling to be the importer of record, the Irish supplier will be responsible and may have to register for UK VAT. A non-UK business can register as a Non-Established Taxable Persons Unit with HMRC; they don’t need a UK physical presence. But they will require a UK EORI number.”

Businesses will need to be established in the UK in order to act as a declarant for customs declarations. If the business doesn’t want to have a presence it will have to appoint a UK-based customs intermediary to deal with customs documentation. Alternatively a non-UK trader without a UK establishment can appoint a full UK agent who will act as the principal and take full responsibility for necessary customs entries, reporting and payment.

 

Creating a UK presence

“You may want to establish a UK presence simply to act as the customs agent for the Irish business. This would involve minimum cost. Or you might want a presence that can receive goods into the UK for onward supply to your customers, enter into commercial contracts with UK customers and employ staff,” said Potter.

She also explained that non-UK businesses can set up UK bank accounts, but added that the anti money laundering policies can be cumbersome and fees may be higher. Some banks insist on a UK legal entity and HMRC will not issue direct VAT repayments to businesses overseas.

Gerry Collins then outlined the issues involved in setting up a legal entity in the UK looking at the options of a UK branch, a separate limited company or a partnership, in terms of time to set up, legal protection, accounting filing, taxation and commercial issues.

“Setting up a separate entity sends a very strong message of market intent and so is good if you’re thinking of expanding. In my 30+ years of experience about 95% of businesses wanting to do this set up a limited company, normally a 100% owned subsidiary. The 5% who set up a partnership are generally in the financial services sector.”

To conclude, Ecovis outlined some key actions that businesses should be taking now given the short timescale to the end of the transition period. These include talking to customs intermediaries, checking likely commodity codes and VAT rates in the UK, appointing a VAT agent to deal with VAT compliance and performing a Brexit risk assessment.

Ecovis has offered Enterprise Ireland clients a free one-hour consultation for specific company enquiries.