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Brexit actions part 3: further guidance from Import Export Support
Brexit actions: notes on the IES checklist jobs 6 to 13
Recently we shared the Import Export Support checklist for preparations for Jan. 1. Here is some more detail on the checklist tasks, including compliance, tariffs and handling Import VAT.
6-9. Compliance. From 1 Jan 2021 declarations will increase five-fold. To minimise the risk of HMRC intervention or review, importers and exporters must ensure compliance.
Key activities include:
• Classification review
• Sample import and export checks for accuracy and correct valuation declared.
• Import and export process and SOP’s reviewed
• Export VAT compliance: get alternative proof of export for consignments with a non-compliant status of export
10. Inco Terms. These define who picks up the freight insurance and duty liabilities and are a mandatory requirement on a CDS declaration (currently NI only) and will be required on import into the EU.
More on Inco Terms
11,12. UK Global Tariff and Common External Tariff. From Jan 1st UK Global Tariff (UKGT) will be applicable for import into the UK from anywhere.
• Note that there are changes to duty rates. There are no increases, just reductions. Rates are either simplified, eg from 4.7% to 4%, or to proactively reduce the rate, or in some cases to reduce the rate to 0%
• The list is downloadable into Excel
• Where a tariff has only 8 digits, simply prefix it 00 to make the 10-digit code required for import
• Common External Tariff (WTO Rates). If a trade deal is not agreed, duty rates listed in the first column of the UKGT list will apply to imports into the EU.
Review UK trade tariffs
13. Postponed Import VAT Accounting. PIVA will allow importers to account for import VAT on their VAT return, rather than using a deferment account.
• Traders do not need to be authorised to do this
• This applies to all imports into the UK, not just those from the EU
• A deferment account is still required for the payment of duty and for CFSP
More on PIVA
Our advice continues to be that businesses should prioritise preparations as the new trade environment starts in just a few weeks.
The highlighted numbers refer to the job number on the checklist