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This publication is available at https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit/express-courier-industry-and-postal-services-what-to-expect-on-day-one-of-a-no-deal-scenario
UK businesses that trade with the EU will broadly follow the same customs controls as businesses trading with the rest of the world – so they will need to adapt their business to comply with these systems, processes and controls.
If you operate an express courier service and currently follow EU customs rules, or a postal service within the Universal Postal Union, the following will apply.
How customs processes will change
The customs controls that apply to rest of the world trade will apply for all trade moving between the UK and the EU, which may mean you receive more consignments that require declarations.
How VAT processes will change
If the UK leaves the EU without an agreement, UK VAT will be payable on goods entering the UK as consignments, sent by overseas businesses.
Low Value Consignment Relief (LVCR) – a tax relief from UK VAT on goods valued £15 or less – will no longer apply to any consignments arriving in the UK, aligning the UK with the global direction of travel on LVCR. This means that all goods entering the UK as consignments, sent by overseas businesses will be liable for VAT unless they are already relieved from VAT under domestic rules (for example zero-rated children’s clothing).
For consignments valued up to and including £135, which are non-excise goods, a technology-based solution will allow VAT to be collected from the overseas business selling the goods into the UK. Overseas businesses will charge VAT at the point of purchase and will be expected to register with an HMRC digital service and account for VAT due.
The digital service is an online registration, accounting, and payments service for overseas businesses. On registration, businesses will be provided with a Unique Identifier which will accompany the consignments they send into the UK. They will then declare the VAT due on those consignments and pay this via their online account.
This ensures the process of paying VAT on consignments does not become difficult for UK consumers and businesses. To give overseas businesses sufficient time to familiarise themselves with their new obligations, the online service will be available for businesses to register in early 2019, prior to 29 March.
On goods worth more than £135 sent as consignments, VAT will continue to be collected from UK recipients in line with current procedures for consignments from non-EU countries.
VAT will also continue to be collected in line with current procedures for all excise goods sent as consignments and potentially in cases where their supplier is not compliant with HMRC’s new consignments policy. HMRC is working with the relevant industry stakeholders and will provide further information in due course.
Actions you can take now
- Assess the impact of this increased demand for declarations on your business, and consider recruiting and training additional customs agents.
- Stay up-to-date with these changes by registering for email alerts. Follow the link, add your email address, select ‘Submit’, select ‘Add subscription’ and choose ‘EU Exit’ then select ‘Submit’.