Customs Changes for Imports from the European Union into the UK

Andy Spencer
February 14, 2022

Whilst the UK leaving the European Union (EU) on 31 December 2020 seems like a long time ago, UK businesses still have to deal with changes to the processes in place when importing goods from suppliers in the EU.

Customs Declarations

Throughout 2021, goods imported into Great Britain from the EU were subject to several easements from a customs perspective. This was to reduce the burden of completing full customs declarations and dealing with all of the consequences of importing goods that were previously not subject to import documentation and controls.

UK businesses were unprepared, partly due to impacts from the COVID-19 pandemic, so these simplifications were extended a few times during 2021. As of 1 January 2022, goods moving between the EU and Great Britain will be subject to full customs declarations and controls. Subsequently, there is no longer the ability to defer customs declarations as was previously the case.

Additionally, any customs duty due on goods will be due at the time of entry rather than when the customs declaration is submitted, as was the case in 2021. Businesses can achieve delayed payment of the customs duty by applying for a duty deferment account with HMRC. In some instances, it can be achieved without the need for a financial guarantee to be lodged, so it is worth considering.

Due to the negotiations between the UK government and the EU on the Northern Ireland Protocol, imports of non-controlled goods from Ireland and Northern Ireland will not be subject to these changes. The previous easements will still apply. This means that customs declarations can be delayed for up to 175 days. The UK government will make further announcements once the discussions on the Protocol have been completed. We will update further when that happens.

Import VAT

Regarding import VAT, Postponed Import VAT Accounting (PIVA) remains available and, whilst not compulsory, it is recommended, as it provides a valuable cashflow benefit.  It applies to imports from all countries and not just the EU. Unlike in some EU countries, it is not automatically applied and has to be claimed when the import declaration is submitted. Therefore, the importer must advise whoever submits the declaration to complete it accordingly. If it is not claimed, import VAT is payable at the time of entry and will have to be recovered on the VAT return – HMRC continues to issue the C79 certificate when VAT is paid at the border, and it is required evidence to recover VAT.

Businesses will also need to remember to download the monthly PIVA statement from HMRC’s website – this is required to determine the amount of import VAT payable on the VAT return. This needs to be done within six months as it is not available after that time.

Intrastat declarations

Another change is regarding Intrastat reporting for imports into Great Britain from the EU.  Arrivals declarations were required during 2021 to provide the UK government with trade statistics, given that importers could delay submitting full customs declarations. Intrastat arrivals are now only required for goods moving from the EU to Northern Ireland – this is because Northern Ireland is still considered part of the EU for goods.

The EU-UK Trade and Cooperation Agreement provisions have to be considered when importing goods from the EU especially regarding the origin of the goods and whether the import is tariff-free. This has been in place since 1 January 2021, but there are practical changes that are considered further in our article which discusses the origin of goods and claiming relief on trade between the EU and UK. These changes mean that imports from the EU are treated in the same way as imports from any other country, except for goods from Ireland and Northern Ireland, which are still subject to special arrangements.

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Andy Spencer

Andy is a highly experienced indirect tax professional who has worked in VAT for over twenty five years. Andy joined Sovos in 2009 and has responsibility for the consulting and compliance teams. Within the consulting team, he is involved in delivering major international VAT projects for blue-chip clients, bringing expertise in both structural compliance and commercial efficiency. Andy specialises in providing clients with bespoke VAT reviews that help them develop into new territories with the appropriate controls in place to manage VAT effectively. Andy has developed expertise in international VAT throughout his career and has advised on a broad range of issues in many countries. Within the compliance team, Andy is responsible for the integrity and professionalism of Sovos’ compliance offering working with the team to ensure clients meet their compliance obligations around the EU and beyond. Andy began his career with HM Customs & Excise and before joining Sovos was VAT Director at Baker Tilly’s Southern UK operation, a Senior VAT Manager at KPMG for six years, and a Senior VAT Manager at Ernst & Young for seven.
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