HMRC publishes “Trading with the EU if there's no Brexit deal” guidance

Steve ChamberlainPosted 7 September 2018 By Steve Chamberlain, Senior Manager - VAT In Taxation

Just before the Bank Holiday, HMRC published two briefing papers setting out some of the key VAT, customs, and excise duty issues arising for EU trade in the event of a “no deal” Brexit on 29 March 2019. Both papers stress that a “no deal” scenario is considered unlikely.


The UK will keep VAT after Brexit, and HMRC says the rules will be as close as possible to those in place now. 

Two sectors facing some uncertainty, for trade with the EU rather than domestic transactions, will be Financial Services, including Insurance; and travel businesses operating the Tour Operators’ Margin Scheme.

The mechanics of some procedures, such as cross-border refunds, and “MOSS” (scheme available for selling some digital services in to other EU countries) will change as UK businesses will access the systems for non-EU, rather than EU, businesses.

Intrastat declarations and EC sales lists (at least for goods) will no longer be appropriate as trade in goods with EU businesses will now be Imports and Exports rather than Intra-EU acquisitions/dispatches.

Customs Procedures

Goods moving to and from EU states will become imports and exports. Import Duty will be payable, and the goods will need to be declared to Customs at Import/export.

Contracts will need to cover who is responsible for handling customs procedures, and paying import taxes.

Importers/Exporters will need to apply for a particular authorisation-an EORI number- if they do not already have one and will need to either engage an Agent to complete customs declarations or file these themselves.

Certain goods may need export licenses, or other supporting documentation. 

The need for customs clearance may impose delays, so those businesses with perishable goods or in “just in time” supply chains will be particularly affected. Clearly, there will be many more customs entries to process, and HMRC will need to recruit and train additional staff.

Helpfully, HMRC have confirmed that VAT registered businesses will account for import VAT via their VAT returns, as currently applies to Acquisition tax, rather than the pay VAT on import and then reclaim it on the next VAT return that currently applies to imports from non-EU suppliers.


While the UK government is confident that it will agree a deal, it is preparing guidance in the event this is not achieved. There will be major impacts in the event of a “no deal Brexit”, particularly for those trading in goods with mainland Europe. “No deal “means no transitional period, with the changes taking place immediately once the UK leaves the EU on 29 March 2019. 

Businesses should consider the potential impacts. These include:-

  • Importers will pay customs duty on purchases from EU suppliers
  • The effective price of goods shipped to EU customers will increase, as import duty will be payable on arrival
  • The need to declare goods to customs may cause delay in supply chains
  • There will be additional formalities to complete, e.g. customs declarations and obtaining authorisation for customs procedures

To discuss this matter or anything else, please call Steve Chamberlain on 01225 472800 or send him an email.

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