October 13, 2020
UK issues new guidance on Brexit and UK imports
On 8 October 2020, the United Kingdom (UK) Government released a comprehensive update on its Border Operating Model that will be effective from 1 January 2021. This was supplemented in the same week by additional guidance on specific types of goods movements, in particular products subject to excise duty.
All businesses moving goods between the European Union (EU) and Great Britain (GB) (and also from the EU to Northern Ireland (NI) via GB) from 1 January 2021 will need to review the relevant sections of the Border Operating Model guidance to understand the impact to their flows and Brexit preparations.
On 31 December 2020, the UK will leave the EU's Single Market and Customs Union, marking the end of the transition period. The UK will begin a new economic relationship with the EU – either with a trade deal (Free Trade Agreement or FTA) or by reverting to World Trade Organization terms.
Leaving the EU's Single Market and Customs Union will result in a number of changes regardless of whether a deal is agreed that businesses will need to navigate. The Border Operating Model sets out the new changes and obligations that businesses must comply with in order to move goods across UK borders (either importing or exporting).
There are some simplifications to "normal" import and export procedures such as postponed import value added tax (VAT) accounting and the removal of the requirement for a Customs Comprehensive Guarantee (CCG). This means easier access to Customs special procedures such as Inward Processing Relief (used for processing/manufacturing goods in the UK) and Customs Warehousing (used for longer term storage of goods or for call off/consignment stock). This presents opportunities for businesses wishing to operate in the UK, to utilize VAT and Duty simplifications, before moving goods onward to the EU.
Border Operating Model Guidance
On 13 July 2020, the UK Government released the UK Border Operating Model, detailing how the UK will manage customs and border control obligations where security is concerned, as well as the fiscal obligations for movement of goods, following its departure from the EU. In short, the Border Operating Model covers:
On 8 October 2020, the Government released a more comprehensive update to this initial publication which now provides further details on the practical steps to be taken. The key new additions and changes include:
The document is a live document and will be updated on an ongoing basis. In addition, there will be further policy and regulatory updates published to compliment the Border Operating Model.
Other notable publications
In addition to the Border Operating Model, there have been some additional publications which support practical management of UK imports and exports. These provide details on:
Importing excise goods into the UK – This is a new publication detailing:
Exporting excise products to the EU – This is a new publication detailing:
Rejected imports – This is a new publication providing links on:
UK Transition: the customs (transitional arrangements) (EU Exit) regulations – This publication provides confirmation of the regulation changes for simplified declarations into the UK:
Taxpayers should consider the following priority actions needed for business continuity from day one:
For further information, please contact one of the following members of our Trade Strategy team or your usual EY contact:
Ernst & Young LLP (United Kingdom), Leeds
Ernst & Young LLP (United Kingdom), Bristol
Ernst & Young LLP (United Kingdom), London
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