HMRC letters to VAT-registered businesses trading with the EU and/or the rest of the world highlight actions necessary to take before the end of the transition period.

The UK will quit the EU an hour before midnight on Friday. There will be a status-quo 11-month transition period (also called implementation period) running until year-end, during which the UK will remain in both the EU customs union and single market.

The letters sent by HMRC explain actions that businesses need to take to prepare for changes to customs arrangements after the transition period, which ends on 31 December 2020. The main steps include getting a UK Economic Operator Registration and Identification (EORI) number and customs facilitation.

There will be no changes to the terms of trade with the EU or the rest of the world during the transition period, unless the rules change for the whole of the EU. This means EU rules for customs, VAT and excise will continue to apply to the movement of goods and trade for this limited time.

There will be no new customs procedures at present.

From 1 January 2021, the way UK businesses trade with the EU will change, and the main changes relate to new customs arrangements. For example, for trade between Great Britain (GB) and the EU, businesses will need to make customs declarations to import and export goods once the UK is outside of the EU’s customs territory. They may want to use a third party such as a customs agent or make
declarations themselves.

In order to be able to submit customs declarations to move goods between GB and the EU after the implementation period ends, businesses will have to obtain a UK EORI number that starts with the letters ‘GB’.  Those who do not have a UK EORI number starting with ‘GB’ will have to register for one at

HMRC will provide more information and guidance during the implementation period as the negotiations progress.

HMRC warns that registration and use of Transitional Simplified Procedures (TSP) for imports from the EU is currently suspended. Businesses will not need to use TSP between February and December 2020. Those businesses that applied for this service should keep their paperwork safe. Postponed VAT Accounting is currently not available during the implementation period either.

Businesses can keep up to date with these changes by registering for HMRC’s email updates.

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Karen Wilkinson works at London School of Finance and Law and writes articles on UK tax law for My Taxes Plus and other financial magazines.


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