Guide to buying and selling goods from the UK to the EU
After Brexit, if you are importing or exporting goods from the UK to the EU they will be treated as any other international destination. Northern Irish business can continue to operate when importing and exporting goods as before in alignment with the EU, based on the Northern Ireland protocol.
Here’s what you need to know to make sure you’re following the right process.
Selling goods within the EU
If you’re selling goods from the UK to the EU, then you will be exporting these goods. There are different rules depending on how you’re moving the goods, and which country you’re moving goods to. You can check these on the HMRC website.
Check if you need a license
Having the right paperwork for your goods is important! If you’re exporting certain goods like animals, plants or antiques you might need specific licenses or certificates.
Get an EORI number
An EORI number is used to move goods between Great Britain and other countries. Your number should start with GB. If you’re posting goods instead of exporting them other ways, your mail carrier will let you know if you need an EORI number.
To apply for your EORI number through HMRC you’ll need:
- If you’re registered for VAT: VAT number and effective date of registration
- If you’re a sole trader or individual: National Insurance number
- Unique Taxpayer Reference (UTR)
- Business start date and Standard Industrial Classification (SIC) code
- Government Gateway user ID and password
Who is transporting the goods?
Whoever transports your goods will also deal with customs and make export declarations. You can do it yourself or hire someone else to do it for you, like a freight company or customs broker. It’s important to agree on exactly which services they offer you so you don’t end up with any unwanted surprises.
If you’re sending goods by mail there will be some documents you need to fill in, but the mail carrier will deal with customs for you.
Make sure you have the right documents
There are a few documents you may need to fill in to export your goods:
- Know your commodity code to classify your goods
- Invoice for the goods
- Any licences or certificates
- Export declaration (if you need one)
- Customs declaration
English, Scottish and Welsh businesses will need to pay duty on their imports and have considerably more administration when importing goods from the EU.
Know your fees
Customs fees may be charged when your goods enter their destination country. These will be based on the value of your goods, and are usually paid by the recipient.
VAT will also be charged on your goods. Find out what you need to know about VAT here.
Buying goods from the EU
Buying goods from the EU is known as importing. Importing goods follows roughly the same process as exporting goods, with a few differences.
- You’ll need an EORI number
- Know the commodity code of your goods
- Know the value of your goods
- Decide who will be importing the goods, like a freight company, your seller or yourself
- Check if you need licences or certificates
- Know your fees, like import duty and VAT
Decide who will deal with UK customs
Whoever deals with UK customs will make the declaration so your goods can cross the border into the UK. This could be the same person who imports the goods, or you could handle this when your goods reach the UK.
Claim your VAT refund
If you’re registered for VAT, you can claim a refund of any VAT paid on imported goods. To do this you’ll need your Import VAT Certificate (C79).
Keeping records is really important. Whether you’re importing or exporting goods, keep records of all your documents, especially invoices, your Invoice VAT Certificate and customs paperwork.
Changes to VAT
For import VAT there is now a positive cash flow impact when importing from any country outside of the UK. This is due to the introduction of Postponed VAT accounting. This applies to UK companies when importing goods from any country. It also applies to Northern Irish companies when importing goods from countries outside of the EU.
Northern Irish companies continue to apply existing EU rules for importing and exporting goods based on ‘The Northern Ireland protocol’. However, PVA (Postponed VAT Accounting) will be applied for Northern Irish businesses for imports and exports outside of the EU.
What is Postponed VAT accounting?
Postponed VAT accounting was originally used in the 1980s. Due to Brexit this was reintroduced in order to avoid an adverse cashflow issue being created. It means that input VAT can be paid and reclaimed on the same return. Input VAT is added to box 1 and box 4 meaning that there no effect on the VAT liability due.
The system prior to Brexit meant that when importing goods from outside of the EU that businesses would have to pay import VAT upfront and wouldn’t be able to reclaim the VAT until the submission of their VAT Return.
Northern Irish companies will still be required to account for acquisitions from EU countries using box 2, 4, 7 and 9 on the VAT return.
These changes are only relevant to VAT registered businesses. There will not be direct changes for businesses not registered for VAT in regards to bookkeeping.
Managing your finances
With Bokio accounting software, you can do your bookkeeping, invoicing, and manage your finances in the same place. We also will handle the majority of the Brexit VAT changes for you when you do your accounting.
We have everything you need to help you prepare for your Self Assessment tax return, submit your VAT Return for Making Tax Digital and keep the right financial records. If you need an extra hand, we can help you find an accountant to work with.
Accounting is kept simple with Bokio, so you have more time to spend running your business.