Taxes and regulations
One of the most significant changes that could affect startups was the introduction on 1 January 2021 of a deferred import VAT measure. It means that businesses and traders importing goods into the UK do not have pay import VAT.
The ‘Rules of Origin’ provision means that any goods may be subject to a customs levy if they arrive in Britain from an EU or a non EU country and are then exported to the EU. This means having to obtain a statement of origin from the exporter or the importer of record. Goods received from an EU country and then exported back to the EU may be subject to customs unless they have been through significant economic change.
Further government information of taxes and charges can be found here.
There was no agreement reached on mutual recognition for certified products, which means if your startup sell consumer goods, some products will need to get regulatory approval in the UK and EU. More information can be found here.
There was also no agreement reached, yet, on mutual recognition for financial services.
“Light touch” border regime
The UK government has introduced a “light-touch” border regime for goods from the EU, to help ease disruption. In practice this means that the government does not require importers into the UK to produce post-Brexit customs declarations or pay any tariffs between 1 January and 30 June 2021 on certain goods. This approach is known as the Customs Freight Simplified Procedure Entry in Declarants Records (CFSP EIDR).
You can read the complete government guidance on the new rules for both importing and exporting here.
Post-transition import checklist for your startup
Check your contracts and the incoterms to determine whether you are obliged to arrange the import as a declarant.
- Research the details on product regulation that may apply to your goods.
Examine the new rules set to change on marking, labelling and marketing standards – you can find out more here.
Check the changes to licences, certificates and special rules for bringing goods into the UK that may apply to you.
Get your GB Economic Operator Registration and Identification (EORI) number. If you trade with Northern Ireland, you may also need an XI EORI number. You need an EORI number to move goods between the UK and non-EU countries. If you do not have one, you may have increased costs and delays. You can find out how to get an EORI number here.
Check whether the goods you are importing are classified as standard, controlled or high-risk.
Stay alert to new tariffs for non EU countries and how they may apply, implications for VAT on imports, and what new customs checks will impact the supply chain. More information on import VAT can be found here.
Alert customers and suppliers that delivery dates could be delayed.