by Oliver Dyas | Tuesday, 28 February, 2023 | Brexit, Uncategorised
A red lane and green lane? Brexit finally done? VAT changes?
A lot has happened in the past 48 hours with the Prime Minister looking to reach an agreement on the Northern Ireland Protocol. This new agreement has been dubbed “The Windsor Framework” but what does this mean for transport and freight?
What is the Northern Ireland Protocol?
The NI Protocol is the trading agreement that was first negotiated during Brexit allowing goods to be transported across the Irish land border – allowing goods to move without the need for customs checks.
However the EU has strict rules for some items on non-EU trade. Thus making it hard to strike a deal.
This special agreement was to keep a level of continuity in trade and to uphold and protect The Good Friday Agreement. Now the UK is looking to change things with agreement from the EU.
Red light, green light
The new plan sets up a green lane and red lane, green for goods only going to Northern Ireland, meaning no checks on the majority of shipments and minimal paperwork. The red lane would be for goods due to travel into the Republic of Ireland or deemed “at risk” of doing so and would face customs checks at NI ports.
Exporters and importers will now need to be registered as a ‘trusted trader’ to use the green lane. All UK-based traders are eligible to apply with HMRC and will need to provide details of any goods they move.
The old way
Goods are checked at ports in NI on arrival, regardless of if they are destined for NI or ROI, then moved to their final destination.
The new way
Goods arrive in NI in one of two lanes, Green lane goods for NI only and this will eliminate unnecessary paperwork, checks and duties.
Red lane for ROI and the EU are checked and moved on. Data-sharing and labelling arrangements will keep this system in check.
A shift in VAT?
Under the old NI Protocol EU VAT rules apply to NI, meaning that any change in UK rules won’t affect NI. Now the UK has “secured full, lasting powers for the UK to set VAT and excise rules in NI. We have done this by removing existing rules and preventing other new EU VAT rules from applying in NI.”
The rules on movement of certain goods have shifted from UK exports to NI. Chilled Lincolnshire sausages are now back on the menu for Northern Ireland. Less restrictions on the movement on such goods we would expect to uptick food freight movement.
Stormont’s say on The Northern Ireland Protocol
Northern Ireland lacks a say in changes in EU rules, whilst being still affected by these rules as part of the Protocol. The changes now seem to be moving towards Stormont having more say and greater input in the future, a new “Stormont Brake” will allow the NI assembly to prevent some EU rules.
A statement from our Commercial Director, Geoff Yates on The Northern Ireland Protocol
“There are so many reasons to be cheerful with the announcement of the newly agreed Northern Ireland Protocol. The financial markets certainly relished it with strong performances reported on the stock exchange on Monday afternoon and Sterling rising rapidly against both the US Dollar and the Euro too.
Brexit is finally done. A full six years after the 2016 referendum an agreement to suit both sides of the separation is certainly welcomed by Northern Ireland.
A good sign of things to come was the sight of the smiling European President, Ursula von der Leyen and Prime Minister Rishi Sunak, signalling an improvement between the UK and the EU.
In practice, it’s difficult to say what it will mean for the movement of goods from GB to Northern Ireland. The introduction of a “Green lane” for British goods via a trusted trader scheme certainly points to a significant easement but as ever the devil will be in the detail.
From our point of view, at the front line of cross border movements, Mondays announcement regarding the Northern Ireland Protocol and improving UK-EU relations was greatly received.”
More information on the government website
Check out EasyEU
by espaceeurope | Friday, 6 January, 2023 | Brexit, Customs Clearance, DDP, European Road Freight, Road Transport
Winter is upon us, both in a physical and financial sense. With frost laying heavy on the grass in the mornings, car windows to scrape before the commute to work or school run, this can be a very difficult time of year.
We are in the depths of winter in a financial sense too. An economy in recession, interest and inflation at their highest for decades, a war in Europe playing havoc with commodities and a squeeze on real-term incomes. Not to mention the economic effects of BREXIT. If you allow it, this unprecedented combination could overwhelm you.
But businesspeople are a resilient breed. Just like in a meteorological winter, where we don extra layers, warmer boots, gloves and hats to protect ourselves against the cold, we can do the same for our businesses. Doing things the same will only result in the same or lesser results (or freezing appendages!).
Support for your Export
January is an important time to start planning for the new financial year too. We’re often asked by clients for support to help grow export lanes and more recently for advice on winning back European business which was lost because of BREXIT.
Reasons to be Optimistic
As our closest neighbour and biggest trading partner, Europe is the logical first step for a company to explore export trade into. British goods are well respected for their quality within Europe and the devaluation in Sterling has made them very attractive financially.
Brexit = Customer Inconvenience
BREXIT not only brought about issues for British companies but for their European customers too. Goods which are exported by default, need to be imported – adding additional layers of complexity which often results in frustration, delays and as we’ve seen over the last two years, loss of trade.
Complexity such as
- Finding a customs agent
- Paying or accounting for import VAT
- Understanding and paying duties
- Unforeseen delays in transport and associated downtime
Make your Exports Attractive Again
There are ways however, of making all these problems for European importers disappear which in turn allows UK exporters to compete on a level playing field with their European competition. Using innovative cross-border solutions could allow UK exporters to re-win the business they lost after BREXIT and use the same tactics to grow new export lanes too.
As sure as springtime will replace winter, Britain will climb out of recession. Re-opening the European market will allow UK exporters to retain and grow the business they had before Brexit.
If we don’t the UK risks losing out to less inconvenient European or Worldwide sources and the overall quality of the products on the market are reduced as a result.
Read about our innovative DDP Incoterm solution to deliver goods into the EU – EasyEU or speak to one of our team on 01543 418700
by espaceeurope | Tuesday, 9 November, 2021 | Brexit, European Road Freight, European Shipping, Express Transport, Service Update
We have experienced many disruptions by French fisherman at French ports over the years causing havoc to the European road freight industry.
Over the last few days, the news headlines have been focusing on the UK / French political relationship and the threat of possible disruption this may cause.
If we cannot agree fishing rights for French fisherman in our waters, the threat of an instant blockade of some vital French ports is very real. This will have a detrimental effect on transit times for all French shipments and any shipments that need to cross French territory. If things get nasty, a slow down by French customs officials on UK exports and imports has been rumoured also.
It might be a good idea, if you can, to stockpile some shipments in the UK and EU if these blockades happen over the next few months.
It is possible that your shipments to or from France may be affected by French action at short notice. Any action would also have an affect on goods transiting France to or from Europe.
We are monitoring the situation closely and will issue updates as and when we have positive information of any action being taken. We do ask however, that you bear in mind the possible French action locking ports to UK ships, possible disruption via the channel tunnel and increasing checks by French Customs on shipments travelling in-between the UK and France for exports and imports.
by espaceeurope | Tuesday, 8 October, 2019 | Brexit, European Road Freight, European Shipping, Road Freight, Road Transport
Extension, Election, Revocation, Referendum, Resignation, Deal, No Deal.
The list goes on. Who knows where we will be with Brexit tomorrow?
As you’ll have seen, the Government No Deal awareness campaign is in full swing but still lacks clarity and concise information on their website www.gov.uk/brexit for Importers and Exporters.
The 12 Point Importers and Exporters Checklist
We believe we have all bases covered here with customs software and training both in place.
To help our customers, many of whom have been going around in circles over the last few months, we’ve researched created 12 point exporter and importer to-do lists.
Have you and your customers and suppliers got all the boxes ticked? Download the Checklists below.
What Brexit help and guidance can Espace offer?
On our website our MD, Tony Shally has highlighted many of his current concerns and the predicted effects of a No Deal exit on the European road freight market. His letter to customers, the checklists and other useful information for Brexit planning can all be found in our dedicated Brexit Section.
We’re ready with our customs software, training and Dover based customs clearance agent to assist with additional declarations and transit documents.
If you have any specific Brexit questions, just email firstname.lastname@example.org or give us a call on 01543 418700.
by espaceeurope | Thursday, 4 April, 2019 | Brexit, Road Freight, Road Transport
In the event of a no deal Brexit the UK government have announced they will introduce Postponed VAT Accounting (PVA) for both EU and non-EU imports by UK registered businesses.
This will enable VAT registered businesses to declare and recover import VAT on their VAT returns, rather than having to pay it upfront and subsequently recover it on their VAT return.
How will this work?
Registration will not be required for importers to use PVA. The intention to use PVA for an import will be declared on the customs entry.
This will come into effect from Day 1 of a no deal Brexit, however it will be optional. VAT can still be paid upfront if an importer wishes to do so.
What statements will be issued?
C79 VAT certificates will not be issued for goods declared using PVA. Instead a monthly postponed import VAT statement will be made available for importers via the government digital service.
This statement will indicate the total VAT postponed for the previous month in order to declare this on the quarterly VAT return.
PVA currently does not exist in the UK. More details on this service will be published by the government in due course.
Other VAT deferral methods.
The currently allows two systems for import VAT deferral (standard deferral and SIVA).
SIVA (Simplified Import VAT Accounting) requires a lower level of financial security than standard import VAT deferral. We therefore suggest importers seek SIVA approval first. VAT registered businesses can apply for SIVA online
Need more help on Brexit?
For more information on how the UK’s attempts to leave the EU will affect your business visit our Brexit Import & Export Guide.
by espaceeurope | Thursday, 21 March, 2019 | Brexit, European Road Freight, Road Freight, Road Transport
BREXIT UPDATE 28th February 2019
No doubt you will have had a barrage of emails from freight forwarders over the last few months telling you what steps you need to take now in the event of a ‘No Deal’ on 29th March.
If Parliament cannot agree on a deal, it now looks like we will be heading towards an extension as it’s clear that there is a Parliamentary majority for not crashing out without a deal. Needless to say at the end of any extension period, if an agreement cannot be reached, the default position would still be ‘No Deal’ so we all still need to be making plans to deal with this eventuality.
Whatever happens; deal or no deal, how we trade with the EU will change in the future when we exit or get to the end of an agreed transition period. Customs intervention will be needed. Things cannot stay as they are as we will be out of the single market the Customs Union.
There is a possibility of an extension to Article 50 and transition period if we get a deal agreed. However, at some point export and import declarations will need to be made and new procedures in place for the collection of any UK import VAT and duty. Our advice would be to look at these points now. Nobody knows what’s going to happen and when it will.
As there are very different implications for exporters and importers, I have summarised what I see to be the priority action points in two sections.
1. Register for a UK EORI number.
2. Choose an agent/broker to make your customs declarations for you if you cannot make them yourselves. Prices for basic entries have dramatically increased recently as demand is far outstripping supply. We can offer this service for you for both exports and imports.
3. Select a commodity code for your goods. Commodity codes classify goods and are a requirement for the customs entry.
4. Choose the correct CPC (Customs Procedure Code). CPC’s identify the customs regimes to which goods are being entered to or removed from. If it is a permanent export to EU it will be code 10 00 001. For other regimes such as; temporary export for an exhibition or for repair in the EU, it will be a different CPC code. More information on CPCs can be found at … https://www.gov.uk/government/publications/uk-trade-tariff-customs-procedure-codes/customs-procedure-codes-box-37
5. Review your contractual Incoterms as they will determine who is responsible for customs declarations and any EU import VAT and duty. Our advice would be that if you are exporting on Ex Works terms, as a bare minimum you take over control of the UK Export declaration. You may find FCA is a more appropriate incoterm to use.
6. The export declaration, sometimes known as a COPY 3 SAD, provides safety and security declarations along with permission for the goods to leave the UK territory.
7. Leaving the organisation of this HMRC requirement to the EU importer could result in delays trying to obtain clearance resulting in delays. The export declaration is your proof of export and should be retained in your records for 6 years. If you sell on DDP, Delivered Duty Paid terms, be careful, many people can interpret DDP terms as including EU VAT which you will not be able to recover. DAP Delivered at Place is another alternative INCO term which allocates responsibility for Import VAT and duty to the EU importer.
8. Consider Authorised consignor status. An authorised consignor is a person / entity authorised by HMRC to carry out customs transit operations. This allows goods to travel under bond to and from authorised premises. The Common Transit Convention (CTC) allows you to move goods across certain borders without paying import duties, until the goods arrive at their final destination where any duties and taxes will be accounted for. A transit declaration is raised and submitted electronically, it will indicate the transit points the goods will be travelling to and from e.g. Birmingham – Rotterdam. After the UK leaves the EU, the UK will stay in the CTC. There’ll be little change to the current process for using CTC after 29 March 2019. Further information can be found in the following link: https://www.revenue.ie/en/customs-traders-and-agents/transit/index.aspx.
9. If you wanted to look at this in more detail, we’d advise you engage a customs specialist. We can recommend a very good one.
10. EU Customs agent will be needed to perform customs clearance of any goods inbound from the UK. Your European customers will need to appoint a preferred agent to do this for them. The process is a lot quicker if they have a VAT and duty deferment account. We have access to a network of European customs agents. However, the normal procedure is for the EU importer to appoint their own agent and agree fees in advance.
11. WTO Tariffs. With a ‘no deal, no transition period’ we would not have a Free Trade agreement with the EU and our exports could have tariffs levied on them. Enter your commodity code into this website to see what the current EU tariff is on your goods for shipments from outside the EU. https://www.trade-tariff.service.gov.uk/trade-tariff/headings/0707?currency=EUR&day=8&month=1&year=2019
12. Pallets. Currently for non-EU countries exporting goods to the EU, the EU require pallets to be heat-treated or cleaned to prevent contamination and specifically marked. As there is a huge shortage of these specific pallets in the UK, the likelihood is that the EU will waiver this requirement for a period of time. Also, if you return pallets or any sort of packaging to an EU customer, this could be classed as an UK export and need an export declaration. UK customs experts are currently discussing this return packaging issue with UK Customs.
1. Apply for TSP (Transitional Simplified Procedure). It takes a few minutes only. https://www.gov.uk/guidance/register-for-simplified-import-procedures-if-the-uk-leaves-the-eu-without-a-deal. This appears to be the best solution for many traders. Only available to UK Importers. Applicants must be a UK registered company. The main benefits are (1) the application process is simple, (2) the importer pays duty (if any) by direct debit and (3) the import process does NOT require any form of entry at the UK Port of arrival; you need only present the importer’s EORI number, if asked. Final import entry is not due until the 4th working day of the following month. It is unclear at this point if your customs agent / broker can make this final import declaration for you. However, TSP is not available for all classifications of goods. The import of all non-controlled goods can be done via TSP. Traders using TSP will need their own duty deferment account in place by 30th June 2019
2. Make sure your EU supplier is aware of their responsibilities. They will need to have an export declaration made via their country’s Customs system. Goods cannot leave their country before permission to proceed has been granted by their Customs authority. They need to partner with a preferred customs agent / forwarder and contact their authorities for full governmental requirements.
3. If they do not have an EU EORI number they will need to apply for one.
4. More information will be needed on their invoices. Values and weights of goods for each commodity code, CPC codes and office of exit from EU. As with UK exports, you will need to pay attention to the INCO terms agreed with your supplier and these must be stated on their invoices.
5. Consider how you will pay VAT. The Government has stated that they will introduce Postponed VAT Accounting (PVA) in the event of a ‘no-deal’. VAT will not be applied on Imports at the point of UK entry. C79 VAT certificates will not be issued for goods using PVA. Instead a monthly postponed import VAT statement will be made available for importers via the Government Gateway service. The statement will indicate the total postponed VAT from the previous month in order to declare this on the quarterly VAT return
6. Consider how you will pay duty. For duty, there are a few options; a duty deferment account, FAS (Flexible Accounting System) payments or use an Agents Deferment account. Under TSP, duty will be taken by direct debit initially. By 30th June 2019, a financial guarantee will be needed for any duties deferred. As we will no longer be part of the EU, our Government has total control over UK import tariffs for imported shipments from EU and non-EU countries. They have confirmed that the new UK import tariffs will be issued soon and once available, UK importers should no longer use the current EU version. (See exports point 4.)
If you need any help or further advice please just get in touch. There’s a lot to take in for both exporters and importers. As far as customs is concerned, I’m very much self-taught. I have a couple of expert customs training / advisory companies that I have been working with. Anything I cannot help with, I’d be happy to pass their contact details on.